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That’s Entertainment - scale and scope economies in the location and clustering of the entertainment economy

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  • Florida, Richard

    ()
    (Martin Prosperity Institute)

  • Mellander, Charlotta

    ()
    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Stolarick, Kevin

    ()
    (Martin Prosperity Institute)

Abstract

It is argued that the introduction of new technology is leading toward the decentralization of the production and consumption of creative products and industries. But creative industries and workers may benefit from being around large markets, access to shared labor, network interactions and economies of scale as well as scope. We hypothesize that the combined effects of scale and scope economies shape significant geographic concentration of the entertainment industry. We test for this using data for 297 U.S. metropolitan areas from 1970-2000 for the entertainment industry overall and its key sub-segments. The findings indicate show that the entertainment industry is concentrated in New York and Los Angeles which significantly outperform other large regions. We further note the rise of one or two highly specialized locations in individual segments of the entertainment industry such as Nashville in music or Las Vegas for dancers. We also find some dispersal of entertainment activity to smaller centers. We conclude that the entertainment industry is characterized by a biurificated spatial structure – with concentration driven by the conjoined effects of scale and scope economies growing at the very top (among the very largest city-regions) and dispersal growing at the bottom.

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Bibliographic Info

Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 158.

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Length: 40 pages
Date of creation: 15 Jan 2009
Date of revision:
Handle: RePEc:hhs:cesisp:0158

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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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Keywords: Entertainment; agglomeration; economies of scale; economies of scope;

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  1. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August.
  2. Marie Connolly & Alan Krueger, 2005. "Rockonomics: The Economics of Popular Music," Working Papers 878, Princeton University, Department of Economics, Industrial Relations Section..
  3. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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