Mechanisms of local knowledge spillovers : evidence from the software cluster in Uruguay

The paper contributes to the understanding of local knowledge spillovers and their importance for innovation in clusters in developing countries. Extensive primary data collected from software firms in Montevideo, Uruguay, are used to bring out the varied nature of knowledge flows that occur in the local cluster. The relative importance of different types of knowledge flow is also highlighted. The most important knowledge flows are not pure spillovers, but rather emanate from intentional action and are associated with commercial transactions with customers