This article provides a firm-centred interpretation of why some industrial clusters forge ahead and others lag behind. It argues that the dynamic growth of a cluster depends on its absorptive capacity and therefore on the capacity of firms to absorb external knowledge and diffuse it into the intra-cluster knowledge system. This article speculates on the relationship existing between the heterogeneity of firms’ knowledge bases with both intra- and extracluster knowledge systems. It concludes by illustrating that a conceptual link exists between firm-level knowledge bases, the cluster absorptive capacity and its potential for growth.
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