Networks, Proximities, and Interfirm Knowledge Exchanges

Abstract

Building on previous literature that provides extensive evidence concerning flows of knowledge generated by interfirm agreements, in this article, we aim to analyze how the occurrence of such collaborations is driven by multidimensional proximity among participants and by their position within firms’ networks. More specifically, we assess how the likelihood that two firms set up a partnership is influenced by their bilateral geographical, technological, organizational, institutional, and social proximity and by their position within networks. Our analysis is based on agreements in the form of joint ventures or strategic alliances, announced over the period 2005–2012, in which at least one partner is localized in Italy. We consider the full range of economic activities, which allows us to offer a general scenario and to investigate specifically the role of technological relatedness across different sectors. The econometric analysis, based on the logistic framework for rare events, provided three noteworthy results. First, all five dimensions of proximity jointly exert a positive and relevant effect in determining the probability of interfirm knowledge exchanges, signaling that they complement each other rather than function as alternative channels. Second, the highest impact on probability is due to technological proximity, followed by organizational, geographical, and institutional proximities, while social proximity has a limited effect. Third, we find evidence concerning the positive role played by networks, through preferential attachment effects, in enhancing the probability of interfirm agreements.