Knowledge Transfer and Inter-Firm Relationship in Industrial Districts: The Role of the Leader Firm

In the literature, knowledge transfer is widely emphasized as a strategic issue for firm competition. In this paper, the knowledge transfer is investigated referring to customer-supplier relationships in industrial districts. The knowledge transfer process is described and a framework is provided to define the main components of the process. A model is proposed to analyse how a leader firm of an industrial district can modify the knowledge nature and adopt different types of supply relationship to increase the effectiveness of knowledge transfer. The model stresses that, when the knowledge transfer has to be fast and reliable between customer and supplier, knowledge has to be codified. However, as the codification level increases, knowledge can be easily shared with other district competitors. Then, the leader firm can also try to control the knowledge transfer by the reduction of the number of suppliers. Referring to the case of an industrial district, some considerations are made to show the practical implications of the knowledge control by the district leader firm.