Social network benefits for cluster firms: A co-worker mobility approach

Regional clusters facilitate social interaction and learning across firms. Here, we assess how social networks of firms influence their competitiveness in relation to cluster- and firm-characteristics. Using survey and administrative data, we simulate co-worker networks that, following the mobility of employees, generate links across companies. Analyzing Sweden’s ICT firms over 20 years, we find that inter-firm co-worker ties, even across companies not directly linked by mobility, predict firm performance. We document that small firms benefit more from inter-regional links and from having access to diverse networks, while local links assist firms to accumulate local knowledge in growing regional clusters.