Spatial Clustering, Local Accumulation of Knowledge and Firm Competitiveness

This paper draws together theory on spatial agglomeration of economic activity, innovation processes, and international business to address the phenomena of spatial clustering, accumulation of knowledge in local milieux and firm competitiveness. It builds a conceptual model explaining the process of local knowledge accumulation and why there are important barriers to the diffusion of knowledge from one local milieu to another. The role of transnational corporations (TNCs) in linking together localized processes of knowledge accumulation is discussed, and it is argued that the actions of TNCs do not in any fundamental way alter our understanding of the localized process of knowledge accumulation.