Abstract
Location externalities and localized knowledge spillovers are the explanation for cluster development predominantly provided by the academic literature to date. Nevertheless, they remain black boxes that hide the complexity of the causal links between (1) the co-location of organizations within clusters and (2) the real reasons why these organizations manage cognitive resources and build knowledge collaborations to this purpose. Linking proximity relationships in dyad formation to the structural properties of knowledge networks allows opening these black boxes and better connecting the microfoundations of clusters to their aggregate performance. The introduction of basic network theory into the literature on the geography of innovation allows for a better understanding of why some clusters succeed while others decline in view of the long-run structuring of their knowledge networks.
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