The Regional Knowledge Economy; a Multilevel Perspective on Firm Performance and Localized Knowledge Externalities

Abstract

In the emerging knowledge economy, the accumulation and transfer of knowledge are considered to be important for economic growth. However, regional scientists and economic geographers stress that knowledge does not diffuse instantaneously around the world; instead, it agglomerates. For this reason, regional and geographical proximity have reemerged in the literature as important conditions of knowledge diffusion. Regions, as collectors of knowledge externalities, contain firm external circumstances that can alter firm performance. With the right abilities, firms can complement their internal capabilities with external ones to integrate and utilize different types of knowledge. This suggests that for a firm, being located in a region rich in knowledge resources is more conducive to performance than being located in a region that is less endowed with knowledge resources. In this dissertation, we investigate the intrinsic multilevel question of how localized knowledge sources are mutually and simultaneously related to economic growth processes at the regional and firm levels.