Knowledge Exchange in Small Firms’ Networks: a Computational Model

This paper explores how specific structural properties of small firms networks emerge from the ways firms exchange knowledge. In particular we are interested in analyzing if and under which conditions the need for knowledge exchange within a set of co-located small firms is able to generate a more or less stable structure of links among firms. We focus on a specific kind of small firms networks such as Industrial Districts (IDs). One of the peculiar characteristics of IDs is flexible specialization: small firms specialize in given phases of the production processes and join up production chains in a flexible and dynamic way depending on market opportunities. Consequently knowledge exchange is mainly related to the matching of complementary knowledge assets. We developed a computational agent-based model of the ID to explore the influence of knowledge exchange mechanisms on network emergence and structure