Over the past decade, the topics’ industrial cluster and interorganizational network has received much attention. A combination of both the topics in a country with a transition economy has not been fully studied. Thus, the purpose of this dissertation is to investigate whether geographic proximity can stimulate interorganizational interactions between firms in an industrial cluster, the Business Park Drenas in Kosovo. This dissertation is based on the Cluster theory and the Interorganizational Network theory. For the theoretical framework, a model was created based on the theories used in this dissertation and the two elements of the IMP Group’s Interaction model. The two elements, power/dependence and ooperation/conflict are used to connect the industrial clusters and the interorganizational network. Therefore, the dissertation provides a new pathway for researchers, since the Interaction model has not been considered in relation to industrial cluster and interorganizational network earlier. A qualitative research strategy was used in this study with an interpretivistic philosophy. The empirical findings and the analysis showed that interorganizational interactions are stimulated through proximity of firms. Trust is displayed as a key factor that stimulates knowledge exchange activities, informal relationships and valuable information exchanges, when selecting partners and relationships between firms and the government. This research may be of value for governments and firms of transition countries, since transition economies are characterized by lack of trust, both among firms and between firms and governments.