How do firms in co-located clusters interact? Evidence from Greater Montreal

We developed a theoretical framework to explore how firms agglomerate and develop linkages within and across co-located clusters in a competitive urban economy. We applied our framework to Montreal, where we analyzed relationships among its aerospace, information technology and artificial intelligence firms. Using network community structure analysis, we show that firm linkages largely agglomerate within industrial lines. However, there are important nuances. Clusters themselves are not homogeneous and firms specializing in similar or complementary technological subfields develop denser connections with each other. Moreover, technological similarity and complementarity, as well as a common business context, force some groups of firms to develop linkages across clusters, creating significant overlap across certain industries.