The importance of geographical proximity for interaction and knowledge sharing has been discussed extensively in economic geography. There is increasing consensus that it is one out of many types of proximities that might be relevant. We argue that proximity may be a crucial driver for agents to connect and exchange knowledge, but too much proximity between these agents on any of the dimensions might harm their innovative performance at the same time. In a study on knowledge networks in the Dutch aviation industry, we test this so-called proximity paradox empirically. We find evidence that the proximity paradox holds to some degree. Our study clearly shows that cognitive, social and geographical proximity are crucial for explaining the knowledge network of the Dutch aviation industry. But while it takes cognitive, social and geographical proximity to exchange knowledge, we found evidence that proximity lowers firms' innovative performance, but only in the cognitive dimension.

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This paper aims at explaining whether R&D subsidies, the engagement in collaboration networks and the location influence the patent activities of biotech firms in Germany! We demonstrate that R&D subsidies focusing on single firms do not increase patent intensity, while subsidies which are granted to joint R&D projects do so to a certain extent. The number of knowledge links firms have is not influencing performance, but the type of network partners has an effect. We found strong evidence that some but not too much cognitive distance between collaboration partners and being located in a cluster have a positive effect.JEL classification: O33, O38, R58

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Many case studies highlight a positive relationship between regions' innovation performance and the intensity of collaboration among regional organizations. However, few efforts have been made to analyze this relation with quantitative approaches. In addition to a theoretical discussion, the paper presents an empirical investigation on this issue utilizing conditional efficiency analysis and patent co-application data for the Electrics & Electronics industry in 270 German labor market regions. The results show that the relationship between regions' innovation performance and the intensities of regional as well as interregional collaboration take the form of an inverted-U shape. Regions with average regional and interregional collaboration intensities are found to outperform those characterized by extremely low, high or unbalanced collaboration behavior.

Despite the growing number of studies, still little is known about how network structures and proximity relations between linked actors evolve over time. Arguments are put forward for the existence of co-evolution dynamics between different types of proximity configurations within networks. An empirical investigation tests these arguments using information on the development of 280 networks. Amongst others, it is shown that institutional and cognitive proximity configurations coevolve in the short as well as in the long-run. While institutional and social proximity configurations are only related in the long run. Moreover, temporal auto-correlation dynamics characterizes the development of cognitive proximity configurations.

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