ABSTRACT
The literature on innovation spaces stresses the importance of knowledge spillovers, particularly local forms that explain the geographic agglomeration of clusters. Local knowledge spillovers are knowledge externalities bounded by geographic region, which foster the flow of information (Ko and Liu, 2015). This enables firms in a region access to knowledge sources and depositories, which may have unintended consequences. Knowledge is often seen as a nonrival production asset so the geographic position of firms can help create positive externalities and lead to economic gain (Zahra, 2015). More importantly, local knowledge spillovers can facilitate further innovation efforts to induce market change. This is evident in countries like Australia, which, despite its large land mass, has the majority of its major regional and urban cities clustered along the eastern coastline.
