Rivarly and learning among clustered and isolated firms

Knowledge has become a crucial asset in modern production systems, and its creation has become a key process in order to sustain or increase competitiveness. The ensuing shift toward a knowledge-based economy has amplified research interests in geographical clustering of firms, for geographical proximity is supposed to ease inter-organizational learning. This paper aims to make a contribution by investigating the relationships between geographical proximity and rivalry with respect to inter-organizational learning and knowledge creation. In our contribution, we wish to explore the relationships between rivalry and geographical proximity at the very level of contacts between individual firms. In particular, we wish to highlight the influence of geographical proximity on rival identification, on the comparison of their knowledge, and on the consequent elaboration of a strategy. Our firms are assumed to be sufficiently small to be led by one single decision-maker. Thus, all concerns regarding individual bounded rationality apply straightforwardly to organizational decision-making. In order to reproduce the interactions between firms, we made use of an agent-based model where the strategic choices of rival firms are derived from general assumptions on competitive behavior and learning processes. Aim of the model is to investigate the co-evolution of firms’ knowledge, strategies and performances.