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Geographical Proximity and the Transmission of Tacit Knowledge

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  • Desrochers, Pierre

Abstract

Since at least the publication of Pigou's "The Economics of Welfare" (Pigou 1932) and Arrow's seminal article on "Economic Welfare and the Allocation of Resources of Invention" (Arrow 1962), most economic theorists have argued that "knowledge is expensive to produce but cheap to reproduce." Following Hayek (1948) and Polanyi (1958), scholars working in the tradition of Austrian economists have dissented from that view by pointing out that if a good deal of knowledge, such as the price of gold, can be easily codified and transmitted. Much important knowledge is tacit and dependent on the "particular circumstances of time and place:" One line of work that supports the Austrian view can be found in economic geography and neighboring disciplines where the geographic concentration of economic activity is explained, among other factors, by the importance of geographical proximity between individuals in the transmission of tacit knowledge. This paper therefore argues that the spatial agglomeration of economic activities constitutes a powerful vindication of Austrian insights. Copyright 2001 by Kluwer Academic Publishers

Suggested Citation

  • Desrochers, Pierre, 2001. "Geographical Proximity and the Transmission of Tacit Knowledge," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 14(1), pages 25-46, March.
  • Handle: RePEc:kap:revaec:v:14:y:2001:i:1:p:25-46
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    Cited by:

    1. Okamuro, Hiroyuki & Nishimura, Junichi, 2011. "Management of Cluster Policies: Case Studies of Japanese, German, and French Bio-clusters," CEI Working Paper Series 2011-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    2. Triyakshana Seshadri & Virgil Storr, 2010. "Knowledge problems associated with creating export zones," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(4), pages 347-366, December.
    3. Philippe Béraud, 2002. "L'innovation comme “concrétisation de l'objet technique” : Quelle est la fonction de l'entrepreneur technologue ?," Innovations, De Boeck Université, vol. 16(2), pages 51-70.
    4. Yuan-Chieh Chang & Ming-Huei Chen & Yuan-Po Lin & Yu-Shiang Gao, 2012. "Measuring Regional Innovation and Entrepreneurship Capabilities," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 3(2), pages 90-108, June.
    5. Nishimura, Junichi & Okamuro, Hiroyuki, 2011. "Subsidy and networking: The effects of direct and indirect support programs of the cluster policy," Research Policy, Elsevier, vol. 40(5), pages 714-727, June.
    6. Negin Salimi & Rudi Bekkers & Koen Frenken, 2015. "Governance mode choice in collaborative Ph.D. projects," The Journal of Technology Transfer, Springer, vol. 40(5), pages 840-858, October.
    7. Niccolò Ghio & Massimiliano Guerini & Cristina Rossi-Lamastra, 2016. "University knowledge and the creation of innovative start-ups: an analysis of the Italian case," Small Business Economics, Springer, vol. 47(2), pages 293-311, August.
    8. repec:spr:nathaz:v:89:y:2017:i:2:d:10.1007_s11069-017-3000-6 is not listed on IDEAS
    9. Arielle John & Virgil Henry Storr, 2011. "The Sociability and Morality of Market Settlements," Chapters,in: Handbook of Creative Cities, chapter 20 Edward Elgar Publishing.
    10. repec:eee:touman:v:52:y:2016:i:c:p:405-415 is not listed on IDEAS
    11. Andrew David Allan Smith, 2016. "The Use and Abuse of Environmental Knowledge: A Bloomington School Interpretation of the Canadian Fisheries Act of 1868," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(2), pages 139-161, June.
    12. Randall Holcombe, 2008. "Advancing economic analysis beyond the equilibrium framework," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(4), pages 225-249, December.
    13. Randall G. Holcombe, 2011. "Cultivating Creativity: Market Creation of Agglomeration Economies," Chapters,in: Handbook of Creative Cities, chapter 19 Edward Elgar Publishing.

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