Tacit Knowledge Transfer, Geographical Proximity, and Inter-Firm Contracts: The Silicon Valley Case

  • Neslihan Aydogan
Part of the International Studies in Entrepreneurship book series (ISEN, volume 18)


The economics of regional clusters has been a popular research area among academic and business authors as well as policymakers (e.g., see Porter 1990; Porter and Stern 2001). Several studies on regional clusters are based on issues related to knowledge transfer among individuals and firms and to the mechanics of increasing returns in relation to agglomeration. As evidence of the effectiveness of knowledge transfer among firms in clusters, Jaffe et al. (1993) show that patent citations come from the same U.S. geographical area. In other words, patent applicants cite patents whose holders are located in the same city, state or statistical metropolitan area. Hence, it appears that geographical proximity facilitates effective knowledge transfer among firms and individuals. In addition, several authors after Marshall (1920) argue that agglomeration reduces transportation costs, facilitates skill transfer, and provides access to a labor pool for the area firms. One issue that...


Tacit Knowledge Geographical Proximity License Agreement Contract Form Transaction Cost Theory 
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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  • Neslihan Aydogan
    • 1
  1. 1.Department of EconomicsÇankaya UniversityUSA

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