knowledge and information networks in an italian wine cluster
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Knowledge and Information Networksin an Italian Wine ClusterAndrea Morrison a b c & Roberta Rabellotti ca Urban and Regional Research Centre Utrecht (URU), Faculty ofGeosciences, Utrecht University, Utrecht, The Netherlandsb KITeS—CESPRI, Universitá Bocconi, Milano, Italyc Department of Economics and Quantitative Methods, Universitàdel Piemonte Orientale, Novara, ItalyPublished online: 03 Jun 2009.
To cite this article: Andrea Morrison & Roberta Rabellotti (2009): Knowledge and InformationNetworks in an Italian Wine Cluster, European Planning Studies, 17:7, 983-1006
To link to this article: http://dx.doi.org/10.1080/09654310902949265
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Knowledge and Information Networksin an Italian Wine Cluster
ANDREA MORRISON�,��,† & ROBERTA RABELLOTTI†
�Urban and Regional Research Centre Utrecht (URU), Faculty of Geosciences, Utrecht University, Utrecht,
The Netherlands, ��KITeS—CESPRI, Universita Bocconi, Milano, Italy, †Department of Economics and
Quantitative Methods, Universita del Piemonte Orientale, Novara, Italy
(Received March 2008; accepted August 2008)
ABSTRACT The aim of this article is to analyse the nature and extent of knowledge and informationnetworks in an Italian wine cluster. Moreover, the relation between firms’ characteristics and theknowledge network structure is also explored. The empirical findings show that knowledge isunevenly distributed in clusters and that networks of knowledge and information differ a greatdeal in terms of their structure. In fact, knowledge flows are restricted to a tightly connectedcommunity of local producers, differing in terms of knowledge assets, innovation behaviour andoverall economic performance with respect to the rest of the firms in the cluster.
1. Introduction
Following Marshall’s (1920) seminal contribution, which introduced the concept of
“industrial atmosphere”, many scholars have stressed the public nature of knowledge in
geographically bounded areas such as industrial districts, clusters, milieux innovateurs,
local production and innovation systems.1 Many studies have underlined the role of per-
sonal, face-to-face interaction as an effective way to transfer knowledge locally (Asheim,
1994; Audretsch & Feldman, 1996; Becattini, 1990; Brusco, 1996; Feldman, 1999; Sax-
enian, 1994) related to some of the basic properties of knowledge; that it is idiosyncratic,
contextual, sticky and tacit. Since knowledge is incorporated in the skills of individuals,
learning mainly occurs through personal interaction, the necessary and, to some extent,
sufficient conditions of which are physical proximity and local embeddedness. Thus, it
is generally claimed that members of a geographical agglomeration benefit from local
knowledge spillovers (LKS), because they are spatially close and embedded in local
networks of informal contacts.
Correspondence Address: Roberta Rabellotti, Department of Economics and Quantitative Methods, Universita
del Piemonte Orientale, Via Perrone 18, 28100, Novara, Italy. Email: [email protected]; roberta.rabellot-
European Planning Studies Vol. 17, No. 7, July 2009
ISSN 0965-4313 Print=ISSN 1469-5944 Online=09=070983–24 # 2009 Taylor & FrancisDOI: 10.1080/09654310902949265
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Some scholars have recently challenged this traditional approach (Boschma & Frenken,
2006; Breschi & Lissoni, 2001a, 2001b; Capello & Faggian, 2005; Lissoni, 2001;
Malmberg & Maskell, 2002) by arguing that it overlooks the very different types of
knowledge flows in local agglomerations, and in turn it fails to distinguish between
those flows that are freely available (e.g. information) and those that are not (e.g. tacit
knowledge). They have argued that underlying the well-accepted belief that informal
contacts represent an easy conduit for transferring tacit knowledge in geographically
bounded areas there is a somewhat ambiguous definition of knowledge and information
as interchangeable concepts, sometimes referred to as rumours, ideas or know-how.
Thus, they suggest that the nature of knowledge flows and the mechanisms through
which they circulate need more detailed investigation.
In this view, physical distance is not the only and main factor explaining the spatial
diffusion of knowledge (Boschma, 2005; Staber, 2001). Several recent works have
shown that knowledge diffusion is influenced by other kinds of distance than geographical
distance, i.e. institutional distance (Rallet & Torre, 2005), cognitive distance (Nooteboom,
1999) and social distance (Breschi & Lissoni, 2009), and that, therefore, knowledge
spreads unevenly among members of a local agglomeration of economic activities
(Giuliani & Bell, 2005; Lissoni & Pagani, 2003). This unevenness also arises from the
inherent heterogeneity that characterizes firms’ learning trajectories and their mechanisms
for building capabilities (Dosi, 1988; Nelson & Winter, 1982), which, in turn, give rise to
the different absorptive capacities of firms (Cohen & Levinthal, 1990). Thus rather than
being an undifferentiated and homogeneous population of firms, these agglomerations
may embody different competing networks, characterized by structural differences (e.g.
dispersed, centralized, cohesive) (Giuliani, 2007; Lazerson & Lorenzoni, 1999; Rabellotti &
Schmitz, 1999).
This article aims to contribute to this field of studies by undertaking a detailed investi-
gation of the structure and constituent properties of knowledge and information networks
in a cluster, simply defined here as a geographical agglomeration of sectorally specialized
firms. Moreover, following a methodological framework proposed in Giuliani and Bell
(2005) and Giuliani (2007), we investigate the relationship between some characteristics
(e.g. size, export strategy, knowledge base) of the firms, their structural position in the
knowledge network as well as their extra-cluster linkages.
In doing so, we contribute to the debate in the literature in several ways. First, our study
goes beyond the often anecdotal evidence on the relevance and diffusion of informal chit-
chat in district-like areas by providing a detailed measure of knowledge and information
flows shared through informal relations. Such new evidence contributes to a growing
area of studies which use social network analysis to investigate linkages among firms
and the different actors in clusters or alike (Boschma & Ter Wal, 2007; Giuliani, 2007;
Graf, 2007; Kauffeld-Monz & Fritsch, 2007; Morrison, 2008; Samarra & Biggiero,
2008). Second, with respect to these network studies, it reaches some new and interesting
results on the role of intra-cluster linkages with respect to relationships with actors exter-
nal to the cluster. This contrasts with the prevailing view, which takes for granted the posi-
tive association between firms’ learning opportunities and network cohesiveness. Too
much clustering or network closure can indeed be detrimental to learning dynamic at
local level (Boschma, 2005). In our case study we show that the larger and more successful
producers in the local system are not interested in forging internal knowledge linkages
with the local small and very small firms; larger firms remain in the periphery of the
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knowledge network and strengthen their linkages with sources of knowledge external to
the cluster, whereas the smaller firms are highly interconnected and communicate with
external sources of knowledge only through a local broker (e.g. extension agency),
which plays the role of gatekeeper for the local system.
The article is organized as follows. Section 2 reviews the main issues in the literature
with a focus on the distinction between knowledge and information (Section 2.1) and
on the structure of knowledge networks (Section 2.2). Section 3 briefly describes the
local system under investigation. Section 4 describes the methodology and discusses the
sample and the survey design. Section 5 presents the findings of the network analysis,
focusing on the topology of information and knowledge networks. Section 6 concludes.
2. The Theoretical Framework
2.1 Information and Knowledge Diffusion in Clusters
A large body of empirical and theoretical literature in the fields of industrial and regional
studies concurs that in contexts such as industrial districts, clusters and local production
systems, informal relations are key channels for the diffusion of knowledge. The line of
reasoning in this literature is that local and personal (i.e. tacit) knowledge is primarily
exchanged by people who are involved in its creation or by those that are part of the
same local community.2
Following Marshall (1920), Becattini (1990) goes back to the concept of “industrial
atmosphere” and emphasizes the importance of localized knowledge externalities that
accrue from face-to-face contacts and the co-location of people and firms. In this
context, access to information and knowledge appears unintentional and facilitated by geo-
graphical proximity and by the fact that the different actors in the cluster (i.e. entrepre-
neurs, technicians, workers) have common cultural values, communication codes and
behavioural norms (Maskell, 2001). According to this view, informal contacts allow
knowledge to be shared by cluster members, while outsiders are excluded, since they
are not embedded in the local community.
Audretsch and Feldman (1996), in the context of US innovative activities, provide
robust empirical evidence of the existence of a positive relationship between spatial clus-
tering, localized knowledge spillovers and firms’ innovative output. The presence of LKS
explains why firms tend to co-locate, and informal relations (i.e. face-to-face contacts)
appear to be the relevant mechanisms for the transmission of tacit knowledge. The view
that knowledge spillovers are highly localized is also expressed in a number of other
econometric studies which show that physical proximity matters since it increases the
actors’ probability of contacts and, hence, the flow of information exchange among
them (Audretsch, 1998; Jaffe, 1989; Jaffe et al., 1993). In these studies, knowledge is con-
sidered to be a public good which spreads pervasively within a spatially bounded area.
Regional economists have criticized this interpretation of space because it focuses only
on geographical proximity; they stress the additional importance of institutional and cul-
tural proximity. A number of contributions have referred to the concept of innovative
milieu to account for the learning processes occurring at local and network levels
(Camagni, 1991; Capello, 1999; Keeble & Wilkinson, 1999; Rallet & Torre, 2005). In
this literature, learning is seen as a collective, social process involving people who
share strong social and cultural values. Informal relations within the milieu, along with
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other mechanisms (e.g. spin-offs; labour mobility; user–producer interactions), contribute
to sustaining the diffusion of knowledge at local level, which is considered a club good
within the boundaries of the cluster (Capello, 1999; Capello & Faggian, 2005). The
mileu approach clearly makes the point that it is not only firms’ geographical proximity
but also their embeddedness that influences the process of innovation in clusters.
However, in common with those contributions focusing mainly on the spatial dimension
of proximity, throughout most this literature there is the tacit assumption that clusters
are a homogeneous community of firms and entrepreneurs, which have the same
culture, origins and knowledge base.
A number of recent contributions in the field of geography of innovation have shifted
their attention to the learning dynamics in clusters at firm level (Boschma & Frenken,
2006; Breschi & Lissoni, 2001a, 2009; Giuliani & Bell, 2005; Malmberg & Maskell,
2002). These approaches point to the fundamental role of social interactions in the creation
and diffusion of knowledge and explore the extent to which geography mediate in this
process. Some of these scholars have also challenged the widespread belief that “industrial
districts, which by definition, rely upon long established and homogeneous social net-
works, are best placed to diffuse and produce tacit knowledge” (Lissoni, 2001,
p. 1480). This claim relies on the argument that tacit knowledge, being personal and
specific (Polanyi, 1962), cannot be communicated by word of mouth; therefore, knowl-
edge is not a public good, freely available to all clusters members, it is rather a club
good, circulating within a few small “epistemic communities”. These communities are
formed by small groups of people (e.g. technicians, professionals), who work in the
same technical fields—although in different firms, come up against the same technical pro-
blems, rely on similar heuristics and procedures on how to conduct research and own
common views about who is allowed to access their knowledge and which part of it can
be released (Cowan et al., 2000). In these more selective contexts as opposed to whole
clusters, informal contacts might function as channels along which knowledge is
exchanged, as shown in several empirical works on collective invention and knowledge
diffusion (Allen, 1983; Rogers, 1982; Schrader, 1991; von Hippel, 1987). These latter
contributions show that technicians feel themselves to be part of a cohesive professional
community, in which reputation and status play a key role in shaping interactions. They
also show that exchanges take the form of trading; technicians are willing to release
crucial information on the basis of reciprocity (Schrader, 1991; von Hippel, 1987). The
above implies that knowledge is not given for free, but is exchanged through barter, and
the preconditions for exchange are trust, mutual recognition and long-term relationships
(Carter, 1989).
However, in addition to exchange of technical advice, technicians use interpersonal
networks for a number of other different purposes: to share information about job oppor-
tunities, markets, use of machinery, inputs, new regulations, etc. (Cross et al., 2001;
Granovetter, 1973; Stuart & Sorenson, 2003). Therefore, contacts established between
peers (e.g. entrepreneurs, workers, researchers) do not necessarily entail transfer of tacit
knowledge; it is more likely that they serve to share information about who knows
whether a customer is reliable or not or whether a machinery is well functioning or not.
Some recent contributions using social network analysis seem to confirm this argument
(Boschma & Ter Wal, 2007; Giuliani, 2007; Morrison, 2008). They show that firms in
clusters or alike are connected through a variety of formal and informal networks (e.g.
business networks, advice networks, technological networks, managerial networks),
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but only a minor fraction of these contacts concern knowledge exchanges. Thus, much of
the evidence showing that people interact through informal means—the often cited cafe-
teria effect—does not support the claim that the content of these exchanges is knowledge,
which conversely is selectively appropriated by few members of the local community.
The above considerations suggest that the literature hype about the importance of clus-
tering for knowledge diffusion has contributed to the creation of a myth (Dahl & Pedersen,
2004). In this article, we aim at investigating the nature of knowledge which is passed on
through informal contacts by distinguishing between those that convey know-how (i.e.
knowledge) and those that vehicle know what or declarative knowledge (i.e. information),
being the former mainly tacit and the latter mainly codified (Lissoni, 2001).3 Moreover,
given that informal contacts are established for different purposes and respond to different
motivations, we expect that the structure of information networks will differ from that of
knowledge networks.
To distinguish between knowledge and information is relevant since it enables to shed
some lights on the nature of knowledge that effectively circulates through informal
relations. The ultimate implication is that the co-location of firms in clusters or alike
may not be a sufficient condition for accessing knowledge, as often claimed by the litera-
ture, but on the contrary, the access to knowledge may be restricted only to a few actors.
It follows that it is also interesting to investigate which actors are able to participate in
those knowledge networks, and what characteristics do they have. Therefore, in order to
address this issue, we focus on the structure of the knowledge network and investigate
which are the firm-specific characteristics that ensure access to knowledge. These
points are further discussed in the next section.
2.2 Knowledge Networks Structure and Firm Characteristics
As to begin with and in line with the above, we can argue that knowledge networks,
differently from chit-chat conversations, are intentionally formed by their members.
Indeed, when technicians need specific technical advice, they purposefully search out
and select those colleagues who they believe are better endowed to provide effective sol-
utions to their problems (Schrader, 1991). Since nurturing these social and professional
relations is costly and time consuming—and also because “technical assistance comes
with the obligation to reciprocate later on” (Carter, 1989, p. 155)—technicians turn to
their smaller community of acquaintances (i.e. the epistemic or professional community),
within which they search for peers whose competencies and experience are not too far
removed from theirs, otherwise acquisition and reciprocation would be difficult and inter-
actions would not generate any benefits (Bathelt et al., 2004; Boschma, 2005). Therefore,
exchanges occur if a certain degree of similarity and complementarity in knowledge assets
holds. The above indicates that interactions aimed at obtaining specific problem-solving
knowledge do not emerge from unplanned and occasional contacts; rather they are struc-
tured and shaped according to the specific characteristics of the exchangers. The analyses,
both theoretical and empirical, of the specific structures and properties of networks affect-
ing knowledge diffusion and their relations with firm characteristics are the focus of a large
body of literature (Ahuja, 2000; Coleman, 1988; Cowan, 2004; Powell & Grodal, 2005;
Rauch & Casella, 2001).
Along these lines and drawing on the methodology used in a previous study that has
applied social network analysis to examine knowledge diffusion in Italian and Chilean
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wine clusters (see Giuliani & Bell, 2005; Giuliani, 2007), we examine the structure of the
knowledge network and relate it to the firm features in another Italian wine cluster.
From the seminal contributions by Nelson and Winter (1982) and Cohen and Levinthal
(1990), we know that firms are able to search, absorb or share knowledge flows according
to their technological capabilities (i.e. absorptive capacity) and inherited knowledge base.
These capabilities affect their position and role in the local knowledge network and con-
sequently shape its structure and, as it is shown in some recent studies, there is a positive
correlation between firms’ knowledge base and centrality in the cluster’s knowledge
network (Boschma & Ter Wal, 2007; Giuliani, 2007; Giuliani & Bell, 2005). In this
view, what really matters is the knowledge endowment of the individual firm, thus the
stronger the firm’s absorptive capacity, the deeper its embeddedness in the local web of
knowledge ties. In the above argument, there is an implicit assumption that firms are
willing to share, and also that they have knowledgeable counterparts in their neighbour-
hoods with which they can profitably interact. In fact, agents are keen to interact with part-
ners able to return valuable knowledge (Schrader, 1991). Thus, firms that are better
endowed with knowledge assets are at the core of the local knowledge network.
Conversely, if this assumption does not hold, we can instead expect that firms with
stronger knowledge bases may search for potential partners outside the local area, with
the ensuing effect of reducing their local embeddedness. This means that the actors at
the core of the local knowledge network are those with weaker knowledge bases, which
collaborate more intensively with other cognitively and spatially proximate actors, since
they are unable to reach distant knowledge sources.
Some recent studies on industrial districts (Belussi et al., 2003; Boschma & Lambooy,
2002) have shown the emergence of a similar scenario characterized by a few leading
firms, sometimes playing the role of knowledge gatekeepers, through which new ideas
enter and reinvigorate the local production system. In some cases, however, lead firms
can prevent knowledge leakage for strategic purposes, by sharing it with only a restricted
group of partners (e.g. collaborators, subcontracting firms) and keeping it marginal for
the others. In other cases, dominant firms, either because of their strategic power or
their stronger competencies, may feel themselves too cognitively distant from the local
system in which they are located and they therefore search for knowledge connections
with outsiders. In these cases, we would expect that firms better endowed with knowledge
assets are loosely connected or isolated with respect to the core of the local knowledge
network.
The above discussion suggests that firms in clusters are willing to invest in local knowl-
edge networks if they are interested in tapping into the local knowledge base; otherwise
they may choose to search for knowledge outside the cluster. This is of particular
relevance in a globalizing economy in which firms increasingly have many opportunities
to connect with distant actors.
3. The “Colline Novaresi” Wine Cluster
The study is based on the collection of primary firm level data in the wine cluster of
“Colline Novaresi”, located in Piedmont, a region producing many appellation wines,
which are among some of the best known Italian wines (e.g. Asti Spumante, Barolo and
Barbaresco).4 As far as exports are concerned, Piedmont is the second biggest exporting
region in Italy after Veneto, with a share of 23% of total Italian wine exports in 2007.
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Although its contribution to regional production is much less than the Southern part of
the region, the local system of “Colline Novaresi” is historically recognized as a wine
cluster, characterized by 300-odd micro- and small firms, most of them being grape
growers.5 Some of the wines produced in the area are classified as wines of quality
produced in identifiable regions Vin de qualite produit dans une region determinee
(VQPRD); these include four DOC wines and one DOCG. In general, local firms cultivate
autochthonous vines and produce local varieties of wine; therefore, the local terroir is one
of their key competitive assets.
During the last two decades, notwithstanding its old tradition, the area’s contribution to
total regional production (nowadays around 2%) has been decreasing, with a sharp reduction
in the area dedicated to vines (the total number of hectares decreased from 12,000 in the
1950s to 800 hectares today). The average size of the wineries in the area is very small
(on average 0.4 hectares), even smaller than the national average (0.8 hectares).6
Despite the average very small size of the firms, according to our findings (see Section
5.3) many local firms are not falling behind; on the contrary, they seem to have taken
measures designed to increase efficiency, improve the quality of wines, adopt new tech-
nologies and introduce innovations.
The local branch of Vignaioli Piemontesi plays a leading role in encouraging modern-
ization. Vignaioli Piemontesi is a regional association, the largest in Italy, which provides
technical assistance to producers in viticulture and related fields. As discussed in Morrison
and Rabellotti (2007), Vignaioli Piemontesi is a key player in the Piedmont Wine Regional
Research System, connecting small and marginal producers to several sources of knowl-
edge, such as the university in Turin and other regional and national research institutions.
The extension agency contributes to diffusing information on the newest technological
advancements and best practice which would otherwise not be accessible to small produ-
cers, through its magazine, through demonstrations to farmers or through a direct consul-
tancy activity.
This process of modernization is a key strategy to survive in the wine industry, an indus-
try known for being traditional but recently having experienced intensive technical
change. In a global market characterized by a shift in demand from bulk to quality
wines, and by an increasing number of competitors from the “new world”, access to
knowledge is a key competitive asset. From this follows the relevance to investigate
how knowledge circulates among firms, through intra-cluster linkages with respect to lin-
kages with actors external to the cluster in a wine local system, such as “Colline Novaresi”
under analysis in this article.
4. Methodology
4.1 The Population and Data Collection
Primary firm level data have been collected via a structured questionnaire enquiring about
intra- and extra-cluster flows of information and knowledge. With regard to selection cri-
teria, the firms interviewed were identified according to their activity and location: from
the total population in the Novara Chamber of Commerce database, we extracted the popu-
lation of wine makers (i.e. wineries that produce wine on their own), thus excluding grape
growers and wine traders.7 Table 1 summarizes some of the structural characteristics of the
26 wine makers interviewed.
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Given that in the “Colline Novaresi” wine cluster, as it is very common in Italy, wineries
are generally family-run and mostly individual businesses, firm’s technician very often
coincides with the owner. Consequently, our interviews were directed to the owner,
being also the oenologist and/or the viticulturist of the firm and therefore the best
informed person in the firm about its broad range of activities and external relations, in
particular those related to technical issues.8
In addition to some general background information, the questionnaire includes (a) a
section on firms’ economic performance (e.g. total sales, exports, main destination
markets), (b) a section on innovation activities (e.g. amount of investments in new tech-
nologies, experimentation activities carried out), (c) a section on firms’ endowment of
human capital (e.g. level of education and training of qualified personnel, external consult-
ants) and (d) two relational sections on intra- and extra-cluster informal linkages aimed at
exchanging information and knowledge.
Relational data were collected through a “roster recall” method: interviewees were pre-
sented with a complete list of the other firms in the cluster and were asked to name all the
firms with which they exchanged knowledge and information. Similarly, a roster including
the main supporting organizations located either within or outside the local area and wine-
ries outside the cluster was shown to the firms.9
4.2 Some Definitions
In this study, we focus on flows of knowledge and information taking place through infor-
mal networks defined as linkages among individuals via face-to-face contacts, which are
not mediated by marked-based mechanisms. Therefore, winery technicians (often
coinciding with the owner) are depicted as nodes in the network and their linkages as
flows of knowledge and information connecting them. Both the individuals connected
through direct ties and those linked to them can in principle accrue benefit from the
sharing of knowledge and information circulating in the network.
A key issue is how to make the distinction between information and knowledge operational
(Lundvall & Johnson, 1994). Information is considered generic information (i.e. declarative
knowledge or know what). Information exchanges can involve a wide range of business
issues. The question is:
Do you have any informal contact with employees—or the owner—of the following
firms (see the list) aimed at exchanging information (about business opportunities,
markets, providers, inputs, machineries or technologies)?
Table 1. The population of wine-making firms (n ¼ 26)
N %
Number of employees1–3 10 38.53–10 11 42.3�10 5 19.2
Year of foundation1990 to today 9 34.61950–1990 7 26.9Before 1950 10 38.5
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(Please indicate the frequency of such interaction: none ¼ 0; occasional ¼ 1; frequent
(every month) ¼ 2; highly frequent (weekly) ¼ 3).
Knowledge exchanges are defined as technical advice to solve problems and the ques-
tion is:
If you experience a technical problem in your routine activity, to which of the following
firms (see the list) do you turn for technical support?
(Please rate the importance you attach to the advice provided for solving your problem
on the basis of the following scale: none ¼ 0; low ¼ 1; medium ¼ 2; high ¼ 3).
As a control, respondents were also asked to indicate the firms that had benefited from
their technical support. These questions allow identifying the sub-networks that arise from
informal conversations among peers—for example, those that oenologists conduce with
colleagues to be informed about market opportunities—from those that imply a learning
process. The former are likely to be highly frequent and based on weak ties. The latter
entails higher stability, need of reciprocation and purposiveness. In other words, they
are based on strong ties and, according to the literature, are more effective in transferring
complex and tacit knowledge (Sorenson et al., 2006)
Based on the relational data, we built a directional database in which every node can be
a source (outward arrow) and/or a receiver (inward arrow) of information/knowledge.
Furthermore, respondents were also asked to indicate and qualify their relationships
with distant actors, in terms of both geographical and social/cognitive distance. We
included in this group local and national business associations, research institutions
such as universities, technical schools and laboratories, extension agencies and wineries
located outside the local cluster.
In the next section, we use socio-metric techniques and graph theory (Wasserman &
Faust, 1994) to analyse the structural characteristics of the networks established in the
local area and to study how knowledge circulates among actors.10
5. The Main Empirical Findings
5.1 Structural Properties of the Networks
A visual examination of the information and knowledge networks (Figure 1) shows that,
as expected, they are different: the former being quite dense and highly connected and the
latter less dense with nodes connected by relatively fewer linkages and with some isolated
nodes disconnected from the local network. The differences are confirmed by some of the
measures presented in Table 2: overall density measures are consistently higher for the
information network than for the knowledge network, these differences being always
statistically significant. As far as non-directional ties are concerned, on average, each
firm is in touch with half (50%) of the actors in the information network; conversely,
the number of contacts drops when knowledge flows are considered (18%). It should
be noted that such a gap is stronger for non-directional density than for mutual
density. This result suggests that contacts through which knowledge circulates, although
undoubtedly fewer than those in the information network, are possibly based on mutual
and stronger relationships. These findings are confirmed by the average number of
contacts established by each winery.
Table 2 also shows that in both networks, mutual density, measured on only recipro-
cated contacts, is lower than non-directional density, which also includes unreciprocated
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contacts. Moreover, the degree of reciprocity shows that knowledge exchanges are almost
exclusively restricted to where ties are reciprocated; for information exchanges this is
always lower. In fact, reciprocity entails high stability and trustworthiness, and is com-
monly associated with knowledge sharing (Schrader, 1991). This finding is in contrast
to the widespread belief, usually supported only by anecdotal evidence, that local
Figure 1. (a) Information and (b) knowledge network
Table 2. Average density measures in the information and knowledge networks
Type of relationInformation
networkKnowledge
networkBootstrap paired
sample t-test
Average density Mutuala 0.35 (0.47) 0.14 (0.35) 4.97�
Non-directionalb 0.50 (0.49) 0.18 (0.39) 6.84�
Valuedc 0.60 (0.94) 0.34 (0.87) 3.47�
Average numberof contactsd
Mutual 8.88 (6.65) 3.69 (2.77)Non-directional 12.62 (5.46) 4.69 (2.71)
Minimum numberof contacts
Mutual 2 0Non-directional 4 0
Maximum numberof contacts
Mutual 25 11Non-directional 25 12
Isolated nodese Mutual 2 5Non-directional 0 1
Degree ofreciprocity (%)f
57.23 89.23
Note: Standard deviation in brackets.aIn a mutual network, a tie between two nodes exists only if reciprocated. This measure is based on an asymmetric
binary matrix.bThe density of a binary network is the total number of ties divided by the total number of possible ties. The
measure is based on the symmetry of the original matrix.cFor a valued network, the indicator is the total of all values divided by the number of possible ties. In this case,
the density gives the average value.dThe average number of other nodes to which a node is directly connected.eIn a directed graph, two vertices are in the same weak component if there is a semi-path connecting them. Two
vertices, x and y, are in the same strong component if there is a path connecting x to y and a path connecting y to x.fWeak reciprocity: percentage of symmetric pairs, no value data.�Significant at 5% level.
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production systems are communities characterized by dense, social interactions based on
reciprocity among local actors.
The heterogeneity in the relational capability of both networks, as measured by the
number of contacts, is another finding that contradicts the traditional wisdom about
local production systems. In the cluster under analysis, there are actors that maintain a
much higher number of contacts than others, indicating a very heterogeneous access to
informational resources in the local knowledge system.
Overall, the evidence presented above confirms that the structure of the information
network is different from that of the knowledge network in terms of connectivity. The
results also provide preliminary evidence supporting the argument that knowledge is
shared within relatively smaller groups of actors with respect to information. They
suggest that dense interactions (i.e. high relational capital) at local level can be observed
only by assuming non-reciprocity among interacting agents.
The next step in the analysis is to investigate how the networks are structured (e.g. frag-
mented, polarized). This is an important issue since the partition of networks in either few
or many communities (e.g. cliques, sub-groups, partitions, core–periphery structure, etc.)
may affect the extent to which knowledge and information circulate within the cluster.
5.2 The Structure of the Knowledge Network
To explore how knowledge and information are shared among the local community and
whether there is a dominant actor, or group of actors, we compute the degree of variability
(i.e. heterogeneity) of the power and betweenness indices (see the appendix for definitions)
and their degree of centralization (i.e. concentration). The degree of variability measures
to what extent actors differ in terms of their abilities to produce, acquire and share
knowledge, whereas the degree of centralization detects the emergence of leaders in the
network. Table 3 shows that both networks have a moderate degree of heterogeneity
(the mean value is higher than the standard deviation), with higher variability in the
knowledge network (57.5) than in the information network (33.6). Similarly, the knowl-
edge network is slightly more concentrated (15.7 vs. 10.35), although in both networks
the degree of centralization is moderate. As far as the betweenness is concerned, we
find much higher variation (the mean value is lower than the standard deviation), and a
slightly, bust still moderate, concentration. Results are reversed for the two networks,
pointing to the presence of more actors acting as bridges in the information network.
Table 3. Concentration and heterogeneity in the information and knowledge networks
Powera Betweennessb
Informationnetwork
Knowledgenetwork
Informationnetwork
Knowledgenetwork
Degree of heterogeneityc 33.6 57.5 163 121Concentration (%) 10.35 15.78 20.69 15.74
aBeta parameter: 0.100000, matrix symmetrized and dichotomized.bNormalized betweenness; matrix dichotomized not standardized.cStandard deviation divided by mean times 100.
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The above results suggest that knowledge and information are not appropriated and
controlled by one single actor. This means that the two networks do not resemble a
typical star configuration in which a central actor controls all the communication flows.
In principle, this is good news since diversity engenders learning. The moderate degree
of heterogeneity, along with the low degree of concentration, suggests that some firms
may be more influential in informal exchanges. This is supported by the in/out-degree
and betweenness centrality indices presented in Table 4, which shows that some actors
(e.g. Rovellotti and Brigatti) have achieved a position over the mean.
Given the heterogeneity detected and the emergence of some leaders, it is interesting to
assess whether a core–periphery configuration emerges out of this group of more central
actors. A core–periphery structure intuitively consists of two groups of actors: on the one
side, those that are tightly connected to each other (i.e. the core) and on the other side,
those that are loosely connected to the core and also are not connected to each other
(the periphery).11 This specific structure of network is particularly relevant because it rep-
resents the degree of cognitive polarization of the local area relating it to specific actors’
features.
Testing this hypothesis implies verifying to what extent the two networks (i.e. infor-
mation and knowledge) reproduce an ideal core–periphery configuration (Borgatti &
Everett, 1999; Everett & Borgatti, 1999). Taking into account the densities within
groups, we focus the analysis on the knowledge network, which is characterized by
such a configuration, while information flows appear rather dispersed over both groups
(Table 5). In the knowledge network, we observe intense core-to-core interactions (the
valued density is 2.35) compared with periphery-to-periphery connections (0.22). The
core-to-periphery (0.37) and periphery-to-core (0.42) linkages, as expected, are rather
sparse, although it is worth noting that a certain amount of knowledge does circulate
between the two groups, especially from the periphery to the core. It is also significant
that the density within the core community is several times higher than the network
average density (0.34, see Table 2), confirming the existence of a cohesive core. Conse-
quently, the remaining part of the network is close to a periphery structure with a lower
than average density (0.22).
Table 4. Out-degree and betweenness centrality indexes
Nodes
Information network Knowledge network
Out-degree Betweenness Out-degree Betweenness
Nodes with the highestcentrality
Rovellotti 52 12.542 22 20.585Brigatti 48 22.93 29 19.812Prolo 43 1.789 10 5.017Mazzoni 29 6.651 7 0.067Dessilani 25 8.589 7 1.684Miru 24 5.689 19 17.963
Nodes with the lowestcentrality
Le Piane 4 0.114 7 3.363Zanetta 4 0 3 0Turetta 4 0 2 0Bianchi 4 0.393 0 0Barbaglia 2 0 9 0.525Ca Nova 2 0.077 3 0
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To better understand the relative importance of linkages among the actors in the core
and in the periphery, we examine the sub-group of the knowledge network consisting of
only strong ties, providing key advice to solve technical problems (see the appendix for
details). Figure 2 shows that the core of strong ties, with the exception of one, coincides
with the original core; also, core nodes are among those with the highest out-degree index
(measured by the size of the node). Evidence of cohesion in the core is further supported
by comparing densities within the two groups (i.e. core vs. periphery). Table 5 shows that
density of core-to-core interactions is equal to 1, while that of periphery-to-periphery
interactions is close to 0 (0.03). Intra-periphery knowledge flows almost disappear
when only strong ties are examined, indicating that they are mainly based on weak and
unstable linkages. Consequently, periphery actors cannot be regarded as an interlinked
knowledge community, although they maintain a few strong ties with the core. This
confirms that the core is a cohesive group of highly interconnected actors who share
knowledge among themselves rather than with peripheral actors.
Given the emergence of a core–periphery configuration in the knowledge network, it
is interesting to link the actors’ different position in the network to their structural and
cognitive characteristics. This is the aim of the next section.
5.3 The Core and the Periphery of the Knowledge Network
In this section, we investigate the existence of a relation between an actor’s position in the
knowledge network and its connections with other actors internal and external to the
cluster, its structural features, its performance indicators and its knowledge bases. To inter-
pret the findings presented in Table 6, we also draw on qualitative evidence collected
through in-depth interviews with technicians, entrepreneurs and key informants from the
locally operating technical and research institutions (e.g. extension services, universities).
In these interviews, we have explored both the motives driving the connections between
firms and the different actors and the participation of the different cognitive groups of
firms (i.e. core, periphery and isolated periphery) in the learning activity in the wine cluster.
Table 5. Core–periphery structure: densities within groupsa
Information network(all ties)b
Knowledge network
All tiesb Strong ties onlyc
Core (11)d Periphery (15) Core (5) Periphery (21) Core (4) Periphery (22)Core 1.41 0.84 2.35 0.37 1 0.17Periphery 0.37 0.18 0.42 0.22 0.15 0.03
aThe core–periphery structure has been obtained using a genetic algorithm implemented by UCINET VI. In order
to test the robustness of this structure we have run the Tabu search algorithm, implemented through the same
software, which provides similar results. The initial and final fitness coefficients are, respectively, 0.247 and 0.593
for the information network and 0.4 and 0.529 for the knowledge network.bThe density of a valued network is given by the total of all tie values divided by the number of all possible ties. In
this case the density gives the average value.cComputed on a dichotomous matrix of the original data set. The maximum value of the density indicator in this
case is equal to 1. Strong ties identify relations that provide the key contribution to solve technical problems (see
the appendix for details).dNumber of firms in parenthesis.
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Table 6 presents information about the structural characteristics, the performance and
the knowledge base of the different groups of firms, identified on the basis of their position
in the local knowledge network.12
Taking into account firms belonging to the overall periphery of the network, they are
larger both in terms of volume and value of production; besides on average, they sell
more to supermarkets13 than firms in the core, and they produce higher-priced wines.14
In terms of performance, peripheral firms have better indicators with respect to both the
rate of growth and the export performance, indicating that they are more internationally
connected than the core firms. Moreover, their performance is also better in terms of
innovation.
In terms of knowledge base, we find that firms in the overall periphery are better
endowed, in terms of knowledge assets than those at the core. In the cluster under inves-
tigation, therefore, peripheral firms are cognitively distant from the firms in the core,
which build a large part of their technological and informational assets on local
sources. These peripheral firms maintain stronger connections than the core with external
sources of knowledge and contribute very little to the intra-cluster learning system. The
relational indicators confirm that the overall periphery is the best connected to external
sources of knowledge. When this finding was discussed with some key informants, they
agreed that for problem-solving activities, peripheral firms rely either on their internal
human resources or on direct contacts with external oenologists,15 rather than on local con-
tacts with other firms or the extension services. Among peripheral firms, most external
contacts are with firms located in the South of Piedmont, which is far more advanced
and export-oriented than the cluster under investigation (see Section 3).
Figure 2. Core–periphery structure of the knowledge network (strong ties only).Note: Node size is proportional to actors out-degree centrality. Triangle nodes stand for core actors,
square ones for periphery actors.
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Table 6. Are firms in the core knowledge network different from firms in the periphery?
Knowledge network position(no. of firms)
Firms structural characteristics (average value)
Wine production (l) Sales (000E)Sales to large retailers (as % of all
distribution channels)
Premium and super-premium wine (as % of the
total production)
Core (4) 27,680 112.4 0 19.7Periphery (8) 37,935 718.6 1.1 20.8Isolated periphery (14) 38,500 261.5 6.6 30
Performance indicators (average value)
Annual growth rate (%) Export performance(export/sales) (%)
Innovative performancea
Core (4) 8.9 7.0 60.0Periphery (8) 16.0 13.5 64.7Isolated periphery (14) 17.5 30.0 75.0
Knowledge base indicators (average value)
% of graduates in technical fields External oenologists(%)
Experiments(%)
Investment in newtechnologies (000E per ha)
Core (4) 40.0 20.0 60.0 2613.2Periphery (8) 64.7 60.0 58.8 4431.7Isolated periphery (14) 50.0 75.0 75.0 12301.5
Openness Local connectivity
% of firms withlinkages outside the
local system
% of firms with linkageswith local business
associations
% of firms withlinkages with
extension services Betweenness Out-degree centrality
Core (4) 40.0 20.0 80.0 10.8 17.2Periphery (8) 52.9 35.2 76.0 5.7 8.1Isolated periphery (14) 50.0 50.0 25.0 0.05 0.5
a% of firms introducing process innovation.
Kn
ow
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Netw
orks
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Concerning the small firms in the core, they are mainly connected to external sources of
knowledge through the main local extension agency, Vignaioli Piemontesi, a key player in
the wine system at regional level, which acts as gatekeeper in the cluster (Morrison &
Rabellotti, 2007; Section 3). As shown in Table 6 and widely confirmed by our in-
depth interviews, the core firms interact intensively with the local extension agency in
many different ways. Many experiments and innovations undertaken by small local
firms, particularly those in the core, are encouraged and often implemented with the assist-
ance of the association’s technicians. Vignaioli Piemontesi is a source of up-to-date tech-
nical knowledge because it participates directly in many research projects financed by
Regione Piemonte in collaboration with scientific institutions such as universities and
other research centres.
To sum up, the above evidence is indicative of a knowledge system that is centred on a
weak core in terms of knowledge endowments, surrounded by a periphery of more knowl-
edgeable actors, connected less strongly with the local area than with external knowledge
sources. The emergence of this peculiar structure suggests that the process of knowledge
socialization, which consists of exchanging ideas, technical advice and problem-solving
activities, does not take place at level of the whole cluster, but it is restricted to few
bounded communities. In the wine local system under investigation, the strongest commu-
nity in terms of density of interactions is the weakest as far as knowledge resources are
concerned. This implies that relying on the local knowledge basis, this community may
be locked into a declining learning path. However, the local extension agency acting as
a technological gatekeeper plays a key role in connecting this weak core to external
sources of knowledge.
6. Conclusions
In recent years, scholars have suggested that informal contacts are relevant and effective
channels for sharing information and knowledge in districts and clusters but few empirical
studies have provided detailed and convincing evidence on this issue. This article contrib-
utes at filling this gap by providing empirical evidence at firm level on informal contacts in
a small Italian wine cluster in order to understand the structural differences of information
and knowledge networks and how firms’ specific characteristics (e.g. size, performance,
knowledge base) may affect their structural position in the knowledge network as well
as their extra-cluster linkages.
Our empirical findings suggest that the conceptual distinction between information and
knowledge is indeed relevant in the analysis of informal networks in local production
systems. In the cluster of “Colline Novaresi”, the investigated networks of informal con-
tacts show different structures depending on what they convey: on the one hand, there is a
dense information network in which actors are linked by non-reciprocal ties; on the other
hand, the knowledge network is rather sparse, with a core of actors connected through
mutual ties. Thus, this study provides new insights into some controversial issues. The
local system analysed is not populated by a homogeneous community of entrepreneurs
and technicians, sharing technical advice and generic information. On the contrary, knowl-
edge flows, defined as technical advice, are restricted to a tightly connected community of
local producers, while information is easily accessible by almost everyone. This implies
that face-to-face contacts are limited in their scope and mainly serve to know what is
produced and who sells it. Knowledge, however, far from being a local public good, is
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actually a club good, whose membership is restricted and not simply regulated by
geographical proximity.
Our finding is in line with a recently increasing body of literature in which it has been
shown that knowledge is unevenly distributed in clusters and that networks (of knowledge,
information, business relationships, input exchanges, management ties, etc.) in clusters
differ a great deal in terms of their production and diffusion mechanisms (Bell, 2005;
Boschma & Ter Wal, 2007; Dahl & Pedersen, 2004; Giuliani, 2007; Giuliani & Bell,
2005; Kauffeld-Monz & Fritsch, 2007; Lissoni & Pagani, 2003; Morrison, 2008). Over-
looking these differences may lead to a biased analysis and misleading implications for
policy. In particular, cluster policy initiatives aimed at facilitating the access to local
know-how should take into account the existence of specific communities of firms/tech-
nicians and eventually select them as policy target rather than the geographical cluster as a
whole. Moreover, knowing the nature, size, cohesiveness and relations among the different
networks populating a cluster may provide useful insights on how to design better services
for potential users.
Furthermore, this study provides interesting findings on who participate in the local
knowledge network. We find that the core of the network, sharing a great amount of
local knowledge, is populated by a group of wineries that are on average smaller in
size, less innovative and less open to external knowledge than the periphery. We
suggest that these features (i.e. size, innovative behaviour) explain the cognitive closeness
of these firms. Their gateway to external sources of knowledge is represented by their
intensive connections with a local extension agency, which is a key player in the regional
system of innovation for the wine industry (Morrison & Rabellotti, 2007).
Conversely, the remaining firms (the periphery), which are on average larger, more
innovative and open to external sources of knowledge, can access knowledge inputs
either through their outside linkages, mainly to the dynamic wine system of the Southern
Piedmont, or by their better-developed internal resources. These peripheral firms are not
interested in tapping into local knowledge and therefore they contribute very little to
intra-cluster learning. These latter findings contrast with the cases discussed in some
recent studies on networks in clusters (Boschma & Ter Wal, 2007), but are in line with
other cases, for instance the Colline Pisane wine cluster discussed in Giuliani (2007),
which appears to be a typical example of declining wine cluster. In other words, our
results, along the lines of some existing evidence, suggests that intra-cluster knowledge
connectivity is not per se associated with positive knowledge endowments or with
better economic and technological performances, rather it depends on the context-specific
characteristics of the cluster under analysis.16
From our results it further descends that larger and more knowledgeable firms (relative
to other cluster’s members) do not necessarily act as knowledge gatekeepers (Graf, 2007;
Morrison, 2008). These firms in fact look for knowledge assets, which, if not available
inside the cluster, are searched elsewhere. Overall, this latter evidence provides insights
into the theoretical argument claiming that global pipelines “when they are too strong
they could threaten the long term existence of a cluster. Strong external linkages
could then provoke segmentation among the members of a cluster, reducing its coherence
and threatening its long-term future” (Bathelt et al., 2004, p. 48).
This study has a number of limitations that we hope will encourage further research on
this topic. The empirical analysis is based on a small number of firms in a peculiar wine
cluster, so concerns may be raised about the universality of the results. As partial answers
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to these potential drawbacks, we stress that the firms included in the research are not drawn
from a sample but they do constitute the population of the wineries in the cluster and
besides, through the survey, we have collected unique relational data, which can be
barely found in already existing larger surveys or secondary databases. Nonetheless, in
order to strengthen the robustness of our conclusions, more empirical evidence from
case studies, covering different sectors and geographical areas, is highly needed.
Moreover on a theoretical ground, this study relies on a definition of knowledge and
information that can be regarded as rough, and partly blurring. We acknowledge this limit-
ation and we believe that a richer conceptualization (on this point see, among others,
Asheim and Gertler (2005)) would be helpful for a deeper understanding of the process
of interactive learning and knowledge diffusion. However, on an empirical ground the
operationalization of somehow vague, abstract and complex concepts into observable
and measurable indicators necessarily requires for simplification.
To conclude, we suggest that some issues, only marginally touched in this study, will
deserve more attention in the literature. Further research should explore themes like the
role of external relations, given that network analyses in clusters have so far been
focused mainly on local linkages, while little is still known on the structural characteristics
of external networks. Another interesting question to address is related to external actors in
clusters: are they likely to have different ability to access to local knowledge networks?
Finally, the dynamics of the networks is still little explored; hence, an effort in collecting
longitudinal data on inter-firm collaboration within clusters is highly welcome.
Acknowledgements
We wish to thank Elisa Giuliani for letting us access the questionnaire elaborated for her
PhD thesis at SPRU, University of Sussex, and for her comments. We acknowledge the
collaboration in the interviews of Ombretta Cabrio and Marco Vuturo. Thanks go to
two anonymous referees, Mauro Lombardi, Mari Sako, Michael Storper and participants
at seminars held at Cespri, Universita Bocconi, and DRUID, Copenhagen Business School
for their comments. Finally, a special thanks goes to the people interviewed, who gave us
their time and knowledge besides frequent opportunities for wine tasting. Financing
from PRIN “Capabilities dinamiche tra organizzazione di impresa e sistemi locali di
produzione”, IRES Piemonte and Fondazione CRT—Progetto Alfieri is gratefully
acknowledged.
Notes
1. The literature has proposed many different, sometimes overlapping, terms and definitions of geographi-
cal agglomeration of economic activities. While acknowledging the relevance of this debate (see Panic-
cia (2002) for a review), the analysis of the peculiarity of these different forms of agglomerations goes
beyond the aim of this work.
2. Most of these approaches refer either explicitly or implicitly to Polanyi’s (1962) conceptualization of
knowledge.
3. We acknowledge that there are many types of knowledge which may be exchanged in informal networks
as it is suggested in Asheim and Gertler (2005), who distinguish among synthetic, analytical and sym-
bolic knowledge. Nevertheless, in the empirical exercise undertaken in this article the definition of
knowledge is simplified for making it operational.
4. The attribution of these appellations depends on strict regulations that establish the production area, the
grape varieties that can be used in a particular regional blend, the vine yield, the wine/grape yield, the
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alcoholic content, production and ageing methods, together with a specification of which kind of
information can be put on the wine label (Odorici & Corrado, 2004). Piedmont produces 11 DOCG
(Denominazione di Origine Controllata e Garantita) wines (over 32 in all Italy) and 45 DOC (Denomi-
nazione di Origine Controllata) (over 311 in all Italy), which account for almost 80% of the overall
regional production and 15% of Italian production of appellation wines. This makes Piedmont the
second biggest Italian producer of DOC and DOCG wines after Tuscany.
5. This area, known as the “wine route”, has its main nodes in four villages: Sizzano, Ghemme, Fara and
Boca located in the province of Novara. The area includes 25 municipalities.
6. Assoenologi (1998) and http://www.provincia.novara.it/Agricoltura/TerritorioAgricolo/vite.php
7. The Chamber of Commerce database includes 71 firms. We have excluded grape growers, farmers pro-
ducing only for self-consumption and farmers for whom wine production is not the core business. The
selection has been refined, along with the criteria indicated above, with the assistance of the representa-
tives of the two largest local associations of farmers (Coldiretti and Vignaioli Piemontesi). The total
number of firms satisfying our criteria is 32, from which four producers are excluded because they
had ceased their activity and two because they were not keen to answer the questionnaire.
8. For those few cases in which the two figures were different, we interviewed both the owner and the
technician.
9. Since an exhaustive list of organizations and firms located outside the local area was not available, we
gave respondents an incomplete list (open roster), asking them to add any other organization they have
contacted. For the firms, we asked them to indicate the number of firms they had been in touch with, their
location and the type of contact.
10. For a brief introduction to the measures and indicators used, see the appendix.
11. Borgatti and Everett (1999, p. 377) define the idea of core–periphery in a discrete model as follows: “the
core periphery model consists of two classes of nodes, namely a cohesive sub-graph (the core) in which
actors are connected to each other in some maximal sense, and a class of actors that are more loosely
connected to the cohesive sub-graph but lack of any maximal cohesion with the core”.
12. Due to the scarceness of more fine-grained data, we acknowledge that some of the indicators used in the
analysis may be considered weak from a statistical point of view. Nevertheless as far as the firm-specific
indicators are concerned, the questions in our survey are in line with the standard surveys carried out at
the more aggregated level (e.g. national census, CIS).
13. In general, only larger producers are able to sell to large retailers such as supermarkets because the
requirements in terms of quality standards, size and continuity of orders are difficult to satisfy for
smaller firms.
14. Bottles sold at an ex-producer price higher than E8.
15. This is confirmed by evidence reported in the last section of Table 6. For example, 60% of firms in the
periphery and 75% of those in the isolated periphery employ an external oenologist as a consultant.
16. This is in line with Ahuja (2000, p. 251, emphasis added) who claimed that “the impact of different
network attributes and positions can only be understood relative to a particular context”.
17. See Wasserman and Faust (1994) for a comprehensive review of measures. Indicators have been com-
puted using UCINET VI and PAJECK.
18. For details, see Bonacich (1987).
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Appendix
The structural properties of local networks are analysed using the following indicators:17
(1) Overall network density is the ratio between the total number of ties and the total
number of possible ties. It is a measure of connectivity and shows the presence of
some relational capital in the local system:
D ¼2L
gðg� 1Þ;
where g are nodes and L identifies all lines in a graph. The density ranges from 0
(L ¼ 0, no lines present) to 1 (all possible lines present).
(2) Actor centrality degree indicates the number of nodes to which each node is directly
connected. The higher the degree, the more actors access to knowledge:
CDðniÞ ¼ dðniÞ;
where di identifies the number of lines incident to it. In directional networks we dis-
tinguish between in-degree centrality (i.e. the number of in-going ties), which
measures the flow of information or knowledge each actor receives, and out-degree
centrality (i.e. the number of out-going ties) measuring the flows generated by each
actor.
(3) Average degree is a synthetic measure obtained by averaging the centrality degree:
d ¼
Pgi¼1 dðniÞ
g:
(4) Strength of ties provides a measure of the importance (in terms of frequency and
quality) and efficiency of communication flows. Respondents were asked to rank
their linkages in terms of frequency on a 1–3 scale (respectively, 1 in a year,
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month, week or more) for their information linkages, and in terms of relevance and
contribution to resolving technical problems on a 1–3 scale (respectively, low,
medium, high) for their knowledge linkages. Strong (weak) knowledge linkages
imply key (not useful) advice on technical problems, while strong (weak) information
ties identify frequent (occasional) contacts among local actors.
To investigate the presence of a core–periphery structure the following measures are
used:
(1) Bonacich power index18 is a version of centrality degree. The centrality of actors
depends on how many connections they develop, and how many connections their
neighbours have. The more connections the actors have, and the more connections
their connected actors have, the lower their power. In our context, power is an indi-
cation of an actor’s ability to be a source of knowledge or information and to
diffuse these flows within the local system.
(2) Betweenness degree of centrality identifies those actors on the shortest path between
two other actors, i.e. “in the middle”, and therefore able to control or impede the com-
munication flow to the detriment of others. In other words, this measure reflects
aspects of arbitrage:
CBðniÞ ¼X
j,k
gjkðniÞ
gjk
;
where i is distinct from j and k. The index minimum is 0 and the maximum is
(g21)(g22)/2.
(3) Centralization index of power and betweenness: “expresses the degree of inequality or
variance in the network as a percentage of that of a perfect star network of the same
size” (Hanneman, 2001, p. 65). Higher centralization (i.e. concentration) for both
indexes means that one actor is the leader of the communication network:
Cj ¼
Pgi¼1 Cjðn
�Þ � CjðniÞ� �
ðg� 1Þðg� 2Þ½ �;
where Cj stands for CD or CB, Cj(n�) is the highest observed value.
(4) Heterogeneity index is equivalent to the coefficient of variation (standard deviation
divided by mean times 100). Higher variance implies higher inequality, that is
actors have different abilities to produce, acquire and control flows of information
and knowledge:
S2j ¼
Pgi¼1 ðCjðniÞ � �CjÞ
� �
g;
where Cj is the mean actor degree index.
To analyse the linkages with organizations and external networks three indicators are
used:
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(1) The indicator of openness measures the external relations of firms, to either firms or
organizations located outside the local area. It is equal to 1 if the interviewee has con-
tacts with firms located outside the Province of Novara, 0 otherwise.
(2) The indicator of collaborations with extension services is a dummy variable equal to 1
if the interviewee has contacts with the local extension service, 0 otherwise.
The indicator of relations with local business associations is a dummy variable equal to
1 if the interviewee has contacts with local wine consortia and business associations, 0
otherwise.
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