Industrial clusters are hotspots for innovation (Porter, 2008; Delgado et al., 2014). Firms in industrial clusters achieve better performance than they do in isolation (Baptista and Swann, 1998). Scholars generally agree that knowledge exchanges and interactive learning are the foundations of cluster innovativeness (Malmberg and Maskell, 2006; Maskell and Malmberg, 1999). The classic argument links geographic proximity to knowledge sharing – particularly complex knowledge – and innovation because this proximity enables regular personal interactions (Audretsch and Feldman, 1996). After investigating the systemic mechanisms at the firm level, economic geographers observed that the embeddedness of firms in localized networks fosters the spread of knowledge that is conducive to cluster innovativeness. Location matters, but being in the right network is probably more important than being in the right place (Giuliani and Bell, 2005). Although interactive learning and relational capital recall the idea of automatic spillovers because knowledge is “in the air,” not all firms have equal access to knowledge (Todtling et al., 2013; Biggiero and Sammarra, 2010). There is increasing agreement that knowledge is exchanged selectively within a cluster’s boundaries. Such heterogeneity in embeddedness combined with the firm’s capacity to absorb external knowledge explains differences in innovation performance (Giuliani, 2007; Boschma and ter Wal, 2007). The firm’s absorptive capacity, also called the human capital of the firm in developmental economics, is unique to the firm and is closely linked to knowledge creation and innovation (Cohen and Levinthal, 1990; Nelson and Winter, 1982). The academic literature generally corroborates the effect of human resource management (HRM) practices on organizational learning and absorptive capacity (Lane and Lubatkin, 1998; Minbaeva et al., 2003; Foss et al., 2009; Murovec and Prodan, 2009; Soo et al., 2017).