Paper to be presented at the 35th DRUID Celebration Conference 2013, Barcelona, Spain, June 17-19 The Dynamics of Technical and Business Networks in Industrial Clusters: Embeddedness, status or proximity? Andrea Morrison Utrecht University URU a.morrison@uu.nl Abstract Informal knowledge networks have often been regarded as a key ingredient behind the success of both high-tech regions and traditional industrial clusters. Yet few empirical studies have attempted to analyze the dynamics of networks within clusters, and little is known about the determinants of these informal exchanges. In this paper, we address this issue by modeling the evolution of business information and technical advice networks within a Spanish industrial cluster: the toy Valley in the Valencia region. We use recent statistical models of network dynamics to address the econometric issues implied by our research questions. We explain the macro-level dynamics of these two network structures by modeling the micro-level decisions of actors to access external knowledge (based the structure of the network and different proximity dimensions). Empirical results suggest that the type of knowledge (business/technical) influence the dynamics of knowledge ties. Although embeddedness plays an equally important role in the circulation of business and technical knowledge, status is more important for the formation of business networks, while proximity is more crucial for the formation of technical networks. Jelcodes:R15,Z