Spatial Proximity and Complementarities in the Trading of Tacit Knowledge

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Nesli Aydogan, Department of S&O, Maastricht University

We model knowledge-trading coalitions in which the transfer of tacit knowledge is unverifiable and requires face-to-face contact, making spatial proximity important. When there are sufficient “complementarities” in knowledge exchange,
successful exchange is facilitated if firms can meet in a central location,
thereby economizing on travel costs. When complementarities are small,
however, a central location may be undesirable because it is more vulnerable to cheating than a structure involving bilateral travel between firms. We believe
that our framework may help explain the structure and stability of multimember
technology trading coalitions such as Sematech and Silicon Valley.

Date: 12 October-00 0000