The partner next door? The effect of micro-geographical proximity on intra-cluster inter-organizational relationships

Substantial research has focused on how innovation is influenced by geography from a macro perspective (e.g., at the country, state, or metropolitan level). However, less attention has been paid to how innovation is configured within a cluster from a micro perspective (e.g., at the district or firm level within a city), i.e., the “micro-geographical proximity” within a cluster. With this paper, we aim to “zoom into” a technology cluster to study the role of the inter-organizational micro-geographical proximity for the establishment of knowledge transfer relationships. Specifically, we analyse whether and how the micro-geographical proximity is related to the formation of three different types of inter-organizational relationships: venture capital (VC) deals, intellectual property (IP) transfer agreements, and R&D strategic alliances. We take empirical evidence from the biopharma cluster in the Greater Boston Area. Our findings suggest the importance of micro-geographical proximity for the establishment of VC deals and IP transfer agreements, which emphasizes the importance of adopting a micro-geographical perspective to highlight this “neighbourhood effect”, which would not be possible when considering spatial proximity at the macro level.