Developing and managing distant markets: the case of KIBS

Spatial proximity plays an important role in explaining the selective birth, survival and growth of KIBS in regional innovation systems and clusters. The literature so far pointed out that the spatial proximity is necessary for sustaining interaction between KIBS and the client. However, spatial proximity may also become a limit to further growth: empirical evidence have highlighted that KIBS firms are increasingly developing interactions outside their local market and even internationalizing. Those studies did not point out which are the variables that sustain market extension. The paper aims ad addressing this gap in the literature. Using original survey data on about 300 KIBS located in the Veneto region (Italy), this paper contributes to the literature by investigating the factors related to the KIBS’ market extension. Findings suggest innovation capabilities are positively related to the market extension of a KIBS. Furthermore, KIBS that cooperate with non-local partners are more likely to serve non-local market. The agglomeration effects (location in urban areas or industrial districts) have instead no positive relation with KIBS market extension.