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Agglomeration dynamics of business services

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  • Börje Johansson

    ()

  • Johan Klaesson

    ()

Abstract

A major characteristic of the economic development in European and North America during the past 10-15 years is a fast expansion of the producer-service sector. This paper considers the location dynamics of two categories of firms: contact-intensive producer-service suppliers and other firms, where the latter form the rest of the economy. Urban regions are decomposed into urban areas, and the latter into zones. In the theoretical framework firms have randomchoice preferences and respond in a non-linear way to time distances in their contact efforts. They make their location decisions in response to local, intra-regional and extra-regional access to market demand. This leads to a non-linear system that over time generates cumulative change processes of growth and decline. The econometric analysis makes use of information about time distances between zones in urban areas as well as between urban areas in the same agglomeration and between urban areas in different agglomerations. This information is employed in an econometric model that depicts for each urban area how the number of jobs in different sectors change in response to the access to customers’ purchasing power in the entire set of urban areas. The estimation results show that the cumulative change processes feature non-linear behaviour.

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Bibliographic Info

Article provided by Springer in its journal The Annals of Regional Science.

Volume (Year): 47 (2011)
Issue (Month): 2 (October)
Pages: 373-391

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Handle: RePEc:spr:anresc:v:47:y:2011:i:2:p:373-391

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Related research

Keywords: C23; L84; R11; R12; R30;

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References

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  1. Martin Andersson & Urban Gråsjö, 2009. "Spatial dependence and the representation of space in empirical models," The Annals of Regional Science, Springer, vol. 43(1), pages 159-180, March.
  2. Martin, Philippe & Ottaviano, Gianmarco Ireo Paolo, 1996. "Growth and Agglomeration," CEPR Discussion Papers 1529, C.E.P.R. Discussion Papers.
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  3. Brakman,Steven & Garretsen,Harry & van Marrewijk,Charles, 2009. "The New Introduction to Geographical Economics," Cambridge Books, Cambridge University Press, number 9780521698030, November.
  4. Alex Anas & Richard Arnott & Kenneth A. Small, 1998. "Urban Spatial Structure," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1426-1464, September.
  5. Johansson, Börje & Forslund, Ulla, 2005. "The Analysis of Location, Co-location and Urbanisation Economics," Working Paper Series in Economics and Institutions of Innovation 46, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  6. Börje Johansson & Johan Klaesson & Michael Olsson, 2003. "Commuters’ non-linear response to time distances," Journal of Geographical Systems, Springer, vol. 5(3), pages 315-329, November.
  7. Abdel-Rahman, H. M., 1988. "Product differentiation, monopolistic competition and city size," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 69-86, February.
  8. Fujita, Masahisa, 1988. "A monopolistic competition model of spatial agglomeration : Differentiated product approach," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 87-124, February.
  9. Andersson, Martin, 2004. "Co-Location Of Manufacturing & Producer Services – A Simultaneous Equation Approach," Working Paper Series in Economics and Institutions of Innovation 8, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  10. Weibull, Jorgen W., 1976. "An axiomatic approach to the measurement of accessibility," Regional Science and Urban Economics, Elsevier, vol. 6(4), pages 357-379, December.
  11. Börje Johansson & Johan Klaesson & Michael Olsson, 2002. "Time distances and labor market integration," Papers in Regional Science, Springer, vol. 81(3), pages 305-327.
  12. Sergio Rey & Brett Montouri, 1999. "US Regional Income Convergence: A Spatial Econometric Perspective," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 143-156.
  13. Rivera-Batiz, Francisco L., 1988. "Increasing returns, monopolistic competition, and agglomeration economies in consumption and production," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 125-153, February.
  14. Martin Andersson & Börje Johansson, 2008. "Innovation Ideas and Regional Characteristics: Product Innovations and Export Entrepreneurship by Firms in Swedish Regions," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 39(2), pages 193-224.
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Citations

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Cited by:
  1. Johansson, Börje & Warda, Peter, 2013. "Internal and External Knowledge Sources of New Export Products," Working Paper Series in Economics and Institutions of Innovation 331, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  2. Martin Andersson & Hans Lööf, 2011. "Agglomeration and productivity: evidence from firm-level data," The Annals of Regional Science, Springer, vol. 46(3), pages 601-620, June.
  3. Öner, Özge, 2013. "RETAIL CITY: Does accessibility to shops explain place attractiveness?," Working Paper Series in Economics and Institutions of Innovation 335, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  4. Martin Andersson & Florian Noseleit, 2011. "Start-ups and employment dynamics within and across sectors," Small Business Economics, Springer, vol. 36(4), pages 461-483, May.
  5. Öner, Özge, 2013. "RETURNS TO LOCATION IN RETAIL: Investigating the relevance of market size and regional hierarchy," Working Paper Series in Economics and Institutions of Innovation 336, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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