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Agglomeration economies in creative industries

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  • Tao, Jin
  • Ho, Chun-Yu
  • Luo, Shougui
  • Sheng, Yue

Abstract

This paper examines agglomeration effects on the productivity of Chinese firms in the creative industries between 2012 and 2014. We estimate productivity with a production function approach, and test whether three measures of agglomeration—namely, specialization, diversity, and density—affect the productivity of firms in creative industries. According to our results, that the density elasticity of productivity is 0.31, which suggests that agglomeration economies matter for creative industries. Urbanization economies resulting from diversity in service industries are the main source of agglomeration economies, but there is no specialization effect after controlling for firm size, ownership, and industry concentration. Further, availability of communication, represented by digital access and transportation convenience, boosts knowledge spillovers and thus enhances urbanization economies. Our findings are robust to alternative specifications, outcome and agglomeration measures, and treatment of outliers.

Suggested Citation

  • Tao, Jin & Ho, Chun-Yu & Luo, Shougui & Sheng, Yue, 2019. "Agglomeration economies in creative industries," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 141-154.
    • Handle: RePEc:eee:regeco:v:77:y:2019:i:c:p:141-154
    DOI: 10.1016/j.regsciurbeco.2019.04.002
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