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Explaining The Demand For Producer Services: Is Cost‐Driven Externalization The Major Factor?

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  • William B. Beyers
  • David P. Lindahl

Abstract

ABSTRACT Producer services employment has grown rapidly within advanced economies in recent years. The bases of demand related to this growth are not well understood by regional scientists. A common view is that this growth is largely attributable to cost‐driven factors and vertical disintegration processes on the part of producer service users. This paper demonstrates that cost‐driven externalization is not the most important force underlying growth in demand for producer services. The need for specialized knowledge is by far the most important factor behind producer services demand, combined with a variety of other cost, quasi‐cost, and non‐cost‐driven forces.

Suggested Citation

  • William B. Beyers & David P. Lindahl, 1996. "Explaining The Demand For Producer Services: Is Cost‐Driven Externalization The Major Factor?," Papers in Regional Science, Wiley Blackwell, vol. 75(3), pages 351-374, July.
    • Handle: RePEc:bla:presci:v:75:y:1996:i:3:p:351-374
    DOI: 10.1111/j.1435-5597.1996.tb00669.x
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    Cited by:

    1. Satya P. Das & Anuradha Saha, 2015. "Growth of business services: A supply‐side hypothesis," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(1), pages 83-109, February.
    2. Henk Kox & Luis Rubalcaba, 2007. "Business services and the changing structure of European economic growth," CPB Memorandum 183, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Benoît Desmarchelier, 2018. "Service Economies and Complexity," Post-Print hal-02393045, HAL.
    4. Zauresh Atakhanova, 2021. "Support services in the extractive industries and the role of innovation," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 34(1), pages 141-150, April.
    5. Robert J. Bennett & Daniel J. Graham, 1998. "Explaining Size Differentiation of Business Service Centres," Urban Studies, Urban Studies Journal Limited, vol. 35(9), pages 1457-1480, August.
    6. Kox, Henk L.M. & Rubalcaba, Luis, 2007. "Analysing the contribution of business services to European economic growth," MPRA Paper 2003, University Library of Munich, Germany.
    7. Yun Zhong & Yehua Dennis Wei, 2018. "Economic Transition, Urban Hierarchy, and Service Industry Growth in China," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 109(2), pages 189-209, April.
    8. Sirat Morshidi, 2000. "Globalising Kuala Lumpur and the Strategic Role of the Producer Services Sector," Urban Studies, Urban Studies Journal Limited, vol. 37(12), pages 2217-2240, November.
    9. William B. Beyers & David P. Lindahl, 1998. "Services and the new economic landscape," ERSA conference papers ersa98p391, European Regional Science Association.
    10. Stephen F. Seninger, 2000. "Consumer Information and Market-area Competition for Health-care Services," Urban Studies, Urban Studies Journal Limited, vol. 37(3), pages 579-591, March.
    11. Kox, Henk L.M. & Rubalcaba, Luis, 2007. "Business services and the changing structure of European economic growth," MPRA Paper 3750, University Library of Munich, Germany.
    12. C. Michael Wernerheim & Christopher A. Sharpe, 2001. "The Potential Bias in Producer Service Employment Estimates: The Case of the Canadian Space Economy," Urban Studies, Urban Studies Journal Limited, vol. 38(3), pages 563-591, March.
    13. Henk L.M. Kox, 2003. "Sources of structural growth in business services," Industrial Organization 0309004, University Library of Munich, Germany.
    14. Kevin O'Connor & Peter Daniels, 2001. "The Geography of International Trade in Services: Australia and the APEC Region," Environment and Planning A, , vol. 33(2), pages 281-296, February.

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