Geography Reference
In-Depth Information
geographical peripherality, have increased. Indeed, as we contend in
Chapter 5, following the recent challenges raised by some scholars to the
centrality of spatial proximity itself as a facilitator of knowledge flows
(e.g., Malmberg and Maskell 2002; Howells 2002; Gertler 2003; Boschma
2005; Torre and Rallet 2005; D'Este et al. 2012), geographical proximity
may not only have a direct impact on knowledge flows, but it could also
play an instrumental role in spurring knowledge linkages and spillovers.
Yet, the literature on proximity emphasizes the largely indirect role of the
spatial dimension in fostering knowledge creation and interactive learning
processes by bridging and strengthening other forms of propinquity such
as cognitive, organizational, social, relational, and institutional proxim-
ity (e.g., Kirat and Lung 1999; Nooteboom 1999; Torre and Gilly 2000;
Boschma 2005; Bouba-Olga and Grossetti 2005; Torre and Rallet 2005;
Moodysson and Jonsson 2007; Ponds et al. 2007; Vicente et al. 2007). Such
arguments are also consistent with three broad sets of empirical evidence
that we will discuss here below.
The first broad set of empirical evidence which suggests that spatial
transactions costs have increased despite the fall in spatial shipment
costs, pointing to a complementary role of geographical proximity, comes
from the usage patterns of ICTs. Gaspar and Glaeser (1998) find that
the closer people are geographically to each other, the more they interact
using information technologies. Moreover, the extent of this interaction
is also associated with the local density of the urban area, such that large
dense urban areas exhibit the greatest internal communications per head
(Gaspar and Glaeser 1998). Additional anecdotal evidence in support
of this argument comes from the fact that many of the industries which
are most dependent on information technologies, such as the advanced
semiconductor-electronics industry (Arita and McCann 2000; 2006) and
the international financial services industry, are themselves amongst the
most geographically concentrated industries in the world. Even Internet
transactions exhibit this localization behaviour (Blum and Goldfarb
2006). While for some activities ICTs and face-to-face contact are likely to
be substitutes, there are also many activities or roles for which information
and communications technologies and face-to-face contact appear to be
primarily complements (McCann 2008). This seems to be the case also for
large MNEs operating in service industries, for which face-to-face interac-
tion continues to have a critical role in shaping success or failure in the
context of globalization (Jones 2007a). Foreign direct investment in high
knowledge-intensive activities appears to be complementary with face-to-
face interaction whereas low knowledge-intensive activities use informa-
tion technology as substitutes for direct personal interaction (Nachum
and Zaheer 2005). Even IT-services markets themselves exhibit this dual
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