Knowledge spillover and network rewiring are interconnected social mechanisms enabling and motivating regional economic growth. In a comparative analysis of knowledge economies in the United States and Sweden, we examine the intertwined social dynamics that they involve. At the micro-level, we explore patterns of entrepreneurial action to identify informal and formal institutional elements at play in enabling and guiding the growth of startup tech firms. At the meso-level, we examine the behavioral patterns of knowledge flow and network rewiring in knowledge economies of the United States (Los Angeles, New York City and Silicon Valley) and Sweden (Stockholm and Lund/Malmo). As predicted by theory and derived hypotheses, the more expansive the knowledge spillover and network rewiring, the greater the breadth of innovation and diversity of technology firms. At the country level, our finding is consistent with varieties of capitalism theory on liberal and coordinated market economies. We find a broader range of economic institutions and a higher volume of startup technology firms in the liberal market economy. In coordinated market economy contexts, nonmarket coordinating institutions constrain the extent of knowledge spillover and innovation outside of established big technology firms; notwithstanding, ongoing institutional change has led to diffusion of liberal market institutions.