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Agglomeration Dynamics of Business Services

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  • Klaesson, Johan

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

  • Johansson, Börje

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

Abstract

A major characteristic of the economic development in European and North America during the past 10-15 years is a fast expansion of the producer-service sector. This paper considers the location dynamics of two categories of firms: contact-intensive producer-service suppliers and other firms, where the latter form the rest of the economy. Urban regions are decomposed into urban areas, and the latter into zones. In the theoretical framework firms have randomchoice preferences and respond in a non-linear way to time distances in their contact efforts. They make their location decisions in response to local, intra-regional and extra-regional access to market demand. This leads to a non-linear system that over time generates cumulative change processes of growth and decline. The econometric analysis makes use of information about time distances between zones in urban areas as well as between urban areas in the same agglomeration and between urban areas in different agglomerations. This information is employed in an econometric model that depicts for each urban area how the number of jobs in different sectors change in response to the access to customers’ purchasing power in the entire set of urban areas. The estimation results show that the cumulative change processes feature non-linear behaviour.

Suggested Citation

  • Klaesson, Johan & Johansson, Börje, 2008. "Agglomeration Dynamics of Business Services," Working Paper Series in Economics and Institutions of Innovation 153, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0153
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    References listed on IDEAS

    as
    1. Alex Anas & Richard Arnott & Kenneth A. Small, 1998. "Urban Spatial Structure," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1426-1464, September.
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    3. Martin, Philippe & Ottaviano, Gianmarco I P, 2001. "Growth and Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 947-968, November.
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    Citations

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    Cited by:

    1. Öner, Özge, 2013. "RETAIL CITY: Does accessibility to shops explain place attractiveness?," Working Paper Series in Economics and Institutions of Innovation 335, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. Wei-Bin Zhang, 2014. "Multi-regional economic growth with public good and regional fiscal policies in a small-open economy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 409-429, March.
    3. Martin Andersson & Florian Noseleit, 2011. "Start-ups and employment dynamics within and across sectors," Small Business Economics, Springer, vol. 36(4), pages 461-483, May.
    4. repec:taf:specan:v:12:y:2017:i:1:p:72-91 is not listed on IDEAS
    5. Martin Andersson & Hans Lööf, 2011. "Agglomeration and productivity: evidence from firm-level data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 601-620, June.
    6. Johansson, Börje & Warda, Peter, 2013. "Internal and External Knowledge Sources of New Export Products," Working Paper Series in Economics and Institutions of Innovation 331, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    7. Zhang, Wei-Bin, 2016. "Economic Globalization and Interregional Agglomeration in a Multi-Country and Multi-Regional Neoclassical Growth Model," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 34, pages 95-121.
    8. repec:spr:lsprsc:v:10:y:2017:i:1:d:10.1007_s12076-016-0173-7 is not listed on IDEAS
    9. Warda, Peter, 2014. "Offshoring, Occupations and Job Tasks: Evidence from Swedish Manufacturing," Working Paper Series in Economics and Institutions of Innovation 375, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    10. Öner, Özge, 2013. "RETURNS TO LOCATION IN RETAIL: Investigating the relevance of market size and regional hierarchy," Working Paper Series in Economics and Institutions of Innovation 336, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    11. Özge Öner, 2017. "Retail city: the relationship between place attractiveness and accessibility to shops," Spatial Economic Analysis, Taylor & Francis Journals, vol. 12(1), pages 72-91, January.
    12. Ana Condeço-Melhorado & Aura Reggiani & Javier Gutiérrez (ed.), 2014. "Accessibility and Spatial Interaction," Books, Edward Elgar Publishing, number 15267, April.
    13. Urban Gråsjö & Charlie Karlsson, 2014. "Accessibility: an underused analytical and empirical tool in spatial economics," Chapters,in: Accessibility and Spatial Interaction, chapter 11, pages 211-236 Edward Elgar Publishing.
    14. Warda, Peter & Johansson, Börje, 2014. "Knowledge Absorption in the Development of Export Products," Working Paper Series in Economics and Institutions of Innovation 368, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    15. Özge Öner, 2013. "Retail Sector Productivity," ERSA conference papers ersa13p1102, European Regional Science Association.

    More about this item

    Keywords

    agglomeration; business services; accessibility; non-linear;

    JEL classification:

    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • 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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