Knowledge creation and absorptive capacity: The effect of intra-district shared competences

SummaryThis paper takes a cross-level approach in contributing to defining the competences accumulated and shared in an industrial district, and to explaining how they differ from firm-specific, knowledge-based capacities. From a dataset of 952 Spanish firms and 35 industrial districts, we provide empirical evidence that industrial districts are spaces with dense networks of information and knowledge transfer, inter-personnel relationships and a strong specialised stock of human capital, which are accessible and shared by all firms embedded in such a district. However, we explain the complementarity between district and firm-specific capacities in order to develop the notion of absorptive capacity, by indicating that the diffusion of shared competences is neither easy nor direct and that it requires a firm's internal learning effort to better absorb localised knowledge spillovers. Results enable us to shed new light on how firms’ knowledge creation and diffusion processes benefit from these external knowledge flows.

Research highlights▶ Industrial districts are spaces with dense networks of information and knowledge transfer, inter-personnel relationships and a strong specialised stock of human capital, which are accessible and shared by all firms embedded in such a district. ▶ Intra-district shared competences are a measure of the structural attractiveness of the knowledge spillovers accessible to intra-district firms. ▶ The diffusion of shared competences is neither easy nor direct and that it requires a firm's internal learning effort to better absorb localised knowledge spillovers. ▶ A firm's external knowledge absorptive capacity involves the usage of mechanisms through which knowledge outside the firm is identified, acquired, assimilated, transformed and applied.