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Culturally Clustered or in the Cloud? Location of Internet Start-ups in Berlin

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  • Kristoffer Moeller

Abstract

Knowledge based firms like IT companies do neither have a capital- nor a land intensive production. They predominantly rely on qualified labour and increasingly depend on the location of its (potential) employees. This implies that it is more likely that firms follow workers rather than the other way around. Contributing to the literature of firm location and consumer cities I empirically test the amenity oriented firm location hypothesis. In particular I investigate whether Berlin internet start-up firms, representing a footloose knowledge-based service industry, locate in urban amenity-rich places. Identification builds on the sudden fall of the Berlin Wall. The intra-city analysis yields a significant impact of urban amenities on the location of internet start-up. A comparison with other service industries suggests that amenities are significant to the location choice of creative sectors whereas no effect can be observed for non-creative firms.

Suggested Citation

  • Kristoffer Moeller, 2014. "Culturally Clustered or in the Cloud? Location of Internet Start-ups in Berlin," SERC Discussion Papers 0157, Spatial Economics Research Centre, LSE.
  • Handle: RePEc:cep:sercdp:0157
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    More about this item

    Keywords

    Firm location; urban amenities; consumer city; internet start-ups; entrepreneurs; Berlin;

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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