Network dynamics in regional clusters: Evidence from Chile

A wealth of empirical literature shows that one of elements of success for regional clusters is that they facilitate the formation of local inter-organizational networks, which act as conduits of knowledge and innovation. While several studies analyse the benefits and characteristics of regional cluster networks, very little is known about how such networks evolve over time and the extent to which their dynamics can affect development processes. Using longitudinal data on a wine cluster in Chile and Stochastic Actor-Oriented Models (SAOM) to measure network dynamics, this paper examines the microdynamics underpinning the formation of new knowledge ties among wineries. It finds that the coexistence of cohesion effects (reciprocity and transitivity) with the weak knowledge bases of some firms in the cluster contribute to a stable informal hierarchical network structure over time. The empirical results have implications for theories on network dynamics in regional clusters and cluster policies.