The objective of this article is to understand the extent to which location in a geographic cluster can explain international alliance formation. Geographic clusters are characterized by several dimensions: agglomeration economies, institutional forces and a manager’s mental models create the environment within the cluster. Therefore, to develop the research propositions, which were tested on a sample of US biotechnology start-ups, the study specifically analysed cluster size and firm competitive behaviour within the cluster to explain the propensity of a start-up to engage in new international alliances. It also examined the potential moderating effect of cluster evolution. Results show that merely being located in a geographic cluster in itself does not increase the probability of forming a new international alliance. Within clusters, internationalization of start-ups through alliance formation results mainly from mimetic behaviour.
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