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Market potential and the employment growth of knowledge-intensive services: comparing different geographical resolutions

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  • Johan Klaesson
  • Therese Norman

Abstract

In order to empirically understand the geographical reach of different markets, it is vital to use an appropriate geographical resolution. Using too large observational units risks hiding the interesting relationships within the regional boundaries. In this study, we aim to investigate and compare similar analyses performed on different geographical levels, with a special focus on innovative industries. Accessibility to markets, services and infrastructure is thought to be major determinants of the potential for economic development and welfare of a region. Earlier empirical research establishing the relationship between agglomeration forces and regional growth typically includes a measure for accessibility or market potential as an explanatory factor. The geographical scale that conventional accessibility measures operate on is usually on the level of municipalities or similar, even when theory suggests that a more disaggregated scale is desirable. Most often the reason for this is limitations in available data. In many cases, the researcher is left with a geographical level based on administrative borders. Analyses on more disaggregated levels allow the researcher to better pinpoint the actual accessibility that each firm faces. In order to shed light on the importance of these issues, this paper utilizes an exploratory approach to investigate the relationship between the spatial distribution and growth of knowledge-intensive services (KIS) and the accessibility to economic activity (market potential). We use regional employment growth in KIS as a proxy for regional innovativeness. The relationship is estimated on two different geographical levels using Swedish data. The more conventional model is estimated with the 290 municipalities in Sweden as the units of analysis. In the Swedish context, this represents the geographically smallest administrative level. In the more novel model, we use the 298 so-called SAMS areas of Jönköping County in Sweden. Our results show that the detailed level is particularly important for the analysis of the growth of the more advanced sectors of the economy, in our setting, the high-tech knowledge-intensive services. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Johan Klaesson & Therese Norman, 2015. "Market potential and the employment growth of knowledge-intensive services: comparing different geographical resolutions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(1), pages 157-185, October.
    • Handle: RePEc:spr:anresc:v:55:y:2015:i:1:p:157-185
    DOI: 10.1007/s00168-015-0701-1
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    References listed on IDEAS

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    Cited by:

    1. Brunow, Stephan & Hammer, Andrea & McCann, Philip, 2017. "Innovation and location in German knowledge intensive business service firms," IAB-Discussion Paper 201722, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Shinya Fukui, 2020. "Firm Agglomeration in Knowledge Intensive Business Service Sectors," Discussion Papers 2008, Graduate School of Economics, Kobe University.
    3. Malgorzata Juchniewicz, 2021. "Factor Competitiveness of the Technological Advanced Services Sector in the European Union Countries: A Typological Analysis," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 260-273.

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    More about this item

    Keywords

    C21; L84; R11; R12;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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