This paper draws on the notion of network resources to examine the association between such resources, in the form of knowledge alliances, and the innovation performance of firms, as well as the extent to which the geographic location of network partners influences this performance. We find that innovation performance is associated with a combination of both network resources and the internal characteristics of firms. In particular, we find that regionally-based network resources are more strongly associated with superior innovation performance. Knowledge alliances with local rival firms and knowledge-intensive business service providers (KIBS) are most strongly associated with superior innovation performance. Our findings suggest that spatial proximity is significant for establishing effective knowledge alliances.