Geography Reference
In-Depth Information
ability of organizations to engage in innovation networks. What is more, the perceived
risk of conl ict is also lower as social proximity adds to trust among organizations. Social
proximity also plays a role in informal knowledge exchange between employees ai liated
to dif erent organizations. Breschi and Lissoni (2003, 2006) found that social connected-
ness between inventors played a signii cant role in knowledge spillovers. That is, social
networks based on personal acquaintances as a result of common working experiences
are important carriers of knowledge exchange based on reciprocity. Agrawal et al. (2006)
point out that i rms often connect because their employees used to work for the same
organization in the past. These i ndings support the concepts of epistemic communi-
ties, invisible colleges and communities of practice. A particular mechanism in which
social proximity plays a key role in the formation of new network relations is known
as 'closure', which refers to ties that are created when two nodes are introduced to one
another by a common third with whom both already have a network relation.
Institutional proximity
Whereas social proximity is dei ned in terms of socially embedded relations between
agents at the micro-level, institutional proximity is associated with institutions at the
macro-level. Both formal institutions (as laws) and informal institutions (like cultural
norms and values) inl uence the extent and the way organizations coordinate their
actions (Edquist and Johnson, 1997; Hall and Soskice, 2001; Hofstede, 1991). As such,
institutions are enabling mechanisms that provide stable conditions for interactive learn-
ing. A classic study on institutional proximity has been an empirical study on the adop-
tion of German machinery in Canadian i rms (Gertler, 1995). The problems in using and
maintaining the machinery could be related to dif erent macro-institutions. In Germany
with long-life employment and on-the-job training, employees had little dii culty in
operating complex machinery, while in Canadian i rms, with high turnover of person-
nel and little intra-i rm training, employees had dii culty operating and maintaining the
complex machinery. This example shows that inter-i rm relationships are often hampered
by a lack of institutional proximity between countries (Hall and Soskice, 2001). Another
example of a lack of institutional proximity is in university-industry-government or
'triple helix' relationships (Etzkowitz and Leydesdorf , 2000), where dif erent key actors
operate in dif erent institutional regimes.
Geographical proximity
The i nal dimension to be distinguished is geographical proximity. There is a strong
claim that geographical proximity is a prime mover of network formation despite glo-
balization, implying that a great deal of interactions still take place between agents that
are geographically proximate (see e.g. Hoekman et al., 2009; Weterings, 2005). Once
having dei ned the four other forms of proximity, geographical proximity can be dei ned
in a restricted manner as the physical distance between actors in absolute (e.g. miles) or
relative terms (e.g. travel time) (Boschma, 2005). Geographical proximity is benei cial
for innovation as ef ective learning requires face-to-face interaction. Such interaction is
easier (and cheaper) to organize when agents are co-located. The relationship between
geographical proximity and co-location is not that straightforward though, because they
do not necessarily mean the same thing. The need for geographical proximity (or better,
face-to-face interactions) may be realized by temporary co-location (bringing agents
