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Agglomeration of knowledge intensive business services and urban productivity

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  • Zhang, Cui

Abstract

While there is considerable empirical evidence on the productivity†enhancing effects of manufacturing agglomeration, the impacts of knowledge intensive business services (KIBS) agglomeration have rarely been examined. We propose a mechanism†based framework to study the precise channels through which KIBS agglomeration contributes to urban productivity. By estimating a model of urban productivity that incorporates agglomeration of manufacturing, KIBS and non†KIBS using city†level data from China, we find that KIBS agglomeration is an important source of aggregate urban productivity. The importance of KIBS agglomeration in city productivity growth is systematically related to a city's level of economic development.

Suggested Citation

Handle: RePEc:eee:paresc:v:95:y:2016:i:4:p:801-819
DOI: 10.1111/pirs.12204
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JEL classification:

  • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
  • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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