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The tendency of advanced services to co-locate and the implications for regional government policy

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  • C. Michael Wernerheim

Abstract

If services have a tendency to agglomerate in some places and not in others, does it make sense to attempt to divert them to areas where agglomeration benefits are weak or not present at all? Using a new spatial data set for Canada applied to a stochastic location model [Ellison, G., & Glaeser, E.L. (1997). Geographic concentration in U.S. manufacturing industries: A dartboard approach. Journal of Political Economy , 105 , 889--927], we find that services co-locate with other services and with other industries across space. Agglomeration economies are pronounced, and general rather than industry specific. Services appear no less prone to co-agglomeration than manufacturing industries. The implications for government policy incentives are mixed, suggesting caution.

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  • C. Michael Wernerheim, 2008. "The tendency of advanced services to co-locate and the implications for regional government policy," The Service Industries Journal, Taylor & Francis Journals, vol. 30(5), pages 731-748, May.
    • Handle: RePEc:taf:servic:v:30:y:2008:i:5:p:731-748
    DOI: 10.1080/02642060802253900
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    1. Barak S. Aharonson & Joel A.C. Baum & Maryann P. Feldman, 2004. "Industrial Clustering and the Returns to Inventive Activity Canadian Biotechnology Firms, 1991-2000," DRUID Working Papers 04-03, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    2. Michael S. Dahl & Christian Ø.R. Pedersen, 2003. "Knowledge Flows through Informal Contacts in Industrial Clusters Myths or Realities?," DRUID Working Papers 03-01, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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    1. Blanca de-Miguel-Molina & Jose-Luis Hervas-Oliver & Rafael Boix & Maria De-Miguel-Molina, 2011. "The Importance of Creative Industry Agglomerations in Explaining the Wealth of European Regions," European Planning Studies, Taylor & Francis Journals, vol. 20(8), pages 1263-1280, March.

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