Abstract
The aim of this research is to examine the importance of the nature and spatial dimension of knowledge sources on innovation of local firms in a cluster based on the regional innovation system approach. First, we introduce the “local buzz” and “global pipeline” argument. Second, we propose a conceptual framework incorporating two spatial dimensions of knowledge sources: local knowledge networks and global knowledge linkages, which include knowledge flows from inward foreign direct investment (FDI) to local firms as a part of global knowledge linkages. Third, we use qualitative analyses and firm survey data from a Guangzhou software cluster to show that global knowledge linkages and local knowledge networks are of similar importance to the innovation of local firms in a cluster, especially for local innovative firms. Customers, competitors, consultants and new personnel are the four most important knowledge sources to the innovation of local firms from both local knowledge networks and global knowledge linkages. The local firms with knowledge more from global knowledge linkages are more innovative. Finally, some policy implications, based on the research, are identified.