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Local Knowledge Spillovers and Development: An Exploration of the Software Cluster in Uruguay


  • Effie Kesidou
  • Marjolein Caniëls
  • Henny Romijn


The paper contributes to the understanding of the nature of local knowledge spillovers and their importance for innovation in clusters in developing countries. Using detailed primary data about a cluster of software firms in Montevideo, Uruguay, the paper finds plenty of evidence of the existence of pure unintentional knowledge spillovers. In addition, it supports previous theoretical studies that have contended that there are also many knowledge flows that are to some degree produced purposively by local parties—these flows can be placed somewhere in between pure spillovers and pure market transactions. While the respondents themselves place most value on knowledge flows that are more or less purposively co-produced with customer transactions, a more objective statistical analysis shows that good product/service-innovation performance is associated with intensive use of flows with more pronounced spillover characteristics. The respondents possibly underrate the latter because of their invisibility and spontaneous nature. Heavy use of knowledge flows lying close to the market-transaction side of the spectrum is found to be associated with relatively advanced organizational capability, but not with product innovation. Overall, the findings point towards the relevance of cluster-based policies to promote innovation in a less developed country context. Various policy measures to stimulate the local circulation of knowledge are suggested.

Suggested Citation

  • Effie Kesidou & Marjolein Caniëls & Henny Romijn, 2009. "Local Knowledge Spillovers and Development: An Exploration of the Software Cluster in Uruguay," Industry and Innovation, Taylor & Francis Journals, vol. 16(2), pages 247-272.
  • Handle: RePEc:taf:indinn:v:16:y:2009:i:2:p:247-272
    DOI: 10.1080/13662710902764444

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    References listed on IDEAS

    1. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
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    Cited by:

    1. Jeremy Galbreath & David Charles & Des Klass, 2014. "Knowledge and the Climate Change Issue: An Exploratory Study of Cluster and Extra-Cluster Effects," Journal of Business Ethics, Springer, vol. 125(1), pages 11-25, November.
    2. Gull, Isabel, 2013. "Das Management von Innovationsclustern: Die operative Clusterführung," Arbeitspapiere 137, University of Münster, Institute for Cooperatives.
    3. Gull, Isabel, 2013. "Die Governance von Innovationsclustern: Eine Analyse der Meta- und der Mesoebene," Arbeitspapiere 131, University of Münster, Institute for Cooperatives.
    4. repec:eco:journ2:2018-02-2 is not listed on IDEAS
    5. Christian Schröder, 2013. "Regional and company-specific factors for high growth dynamics of ICT companies in Germany with particular emphasis on knowledge spillovers," Papers in Regional Science, Wiley Blackwell, vol. 92(4), pages 741-772, November.
    6. Gull, Isabel, 2015. "Das Management von Innovationsclustern: Ergebnisse einer empirischen Analyse," Arbeitspapiere 147, University of Münster, Institute for Cooperatives.
    7. Jeremy Galbreath & David Charles & Eddie Oczkowski, 2016. "The Drivers of Climate Change Innovations: Evidence from the Australian Wine Industry," Journal of Business Ethics, Springer, vol. 135(2), pages 217-231, May.
    8. Basant, Rakesh & Chandra, Pankaj & Upadhyayula, Rajesh, 2011. "Knowledge Flows and Capability Building in the Indian IT Sector: A Comparative Analysis of Cluster and Non-Cluster Locations," IIMA Working Papers WP2011-10-02, Indian Institute of Management Ahmedabad, Research and Publication Department.


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