IDEAS home Printed from https://ideas.repec.org/p/unm/umagsb/2015029.html
   My bibliography  Save this paper

Causal relations between knowledge-intensive business services and regional employment growth

Author

Listed:
  • Brenner T.
  • Capasso M.
  • Duschl M.
  • Frenken K.
  • Treibich T.G.

    (GSBE)

Abstract

This paper studies the causal relations between regional employment growth in Knowledge-Intensive Business Services KIBS and overall regional employment growth using German labour-market data for the period 1999-2012. Adopting a recently developed technique, we are able to estimate a structural vector autoregressive model in which the causal directions between KIBS and other sectors are examined including various time lags. One main finding holds that although regional growth has a negative short-term effect on KIBS, KIBS growth has a long-term positive effect on the whole regional economy. This result confirms the claim that KIBS can play a key role in regional policies. Distinguishing between financial and non-financial KIBS, we find that financial KIBS have a procyclical effect on regional growth underlining the potential de-stabilizing effect of a large financial sector.

Suggested Citation

  • Brenner T. & Capasso M. & Duschl M. & Frenken K. & Treibich T.G., 2015. "Causal relations between knowledge-intensive business services and regional employment growth," Research Memorandum 029, Maastricht University, Graduate School of Business and Economics (GSBE).
  • Handle: RePEc:unm:umagsb:2015029
    as

    Download full text from publisher

    File URL: https://cris.maastrichtuniversity.nl/portal/files/854470/content
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alex Coad & Tom Broekel, 2012. "Firm growth and productivity growth: evidence from a panel VAR," Applied Economics, Taylor & Francis Journals, vol. 44(10), pages 1251-1269, April.
    2. Giulio Bottazzi & Alex Coad & Nadia Jacoby & Angelo Secchi, 2011. "Corporate growth and industrial dynamics: evidence from French manufacturing," Applied Economics, Taylor & Francis Journals, vol. 43(1), pages 103-116.
    3. Christopher A. Sims, 1986. "Are forecasting models usable for policy analysis?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-16.
    4. Roger Lee & Gordon L. Clark & Jane Pollard & Andrew Leyshon, 2009. "The remit of financial geography--before and after the crisis -super-1," Journal of Economic Geography, Oxford University Press, vol. 9(5), pages 723-747, September.
    5. Jensen, Morten Berg & Johnson, Bjorn & Lorenz, Edward & Lundvall, Bengt Ake, 2007. "Forms of knowledge and modes of innovation," Research Policy, Elsevier, vol. 36(5), pages 680-693, June.
    6. Giulio Bottazzi & Angelo Secchi & Federico Tamagni, 2014. "Financial constraints and firm dynamics," Small Business Economics, Springer, vol. 42(1), pages 99-116, January.
    7. Giorgio Fagiolo & Mauro Napoletano & Andrea Roventini, 2008. "Are output growth-rate distributions fat-tailed? some evidence from OECD countries," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(5), pages 639-669.
    8. Sverre J. Herstad & Bernd Ebersberger, 2014. "Urban agglomerations, knowledge-intensive services and innovation: establishing the core connections," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 26(3-4), pages 211-233, March.
    9. Stolz, Stéphanie & Wedow, Michael, 2005. "Banks' regulatory capital buffer and the business cycle: evidence for German savings and cooperative banks," Discussion Paper Series 2: Banking and Financial Studies 2005,07, Deutsche Bundesbank.
    10. Coad, Alex & Binder, Martin, 2014. "Causal linkages between work and life satisfaction and their determinants in a structural VAR approach," Economics Letters, Elsevier, vol. 124(2), pages 263-268.
    11. Erica L. Groshen & Simon M. Potter, 2003. "Has structural change contributed to a jobless recovery?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Aug).
    12. Egil Ferkingstad & Anders L{o}land & Mathilde Wilhelmsen, 2011. "Causal modeling and inference for electricity markets," Papers 1110.5429, arXiv.org.
    13. Nigar Hashimzade & Michael A. Thornton (ed.), 2013. "Handbook of Research Methods and Applications in Empirical Macroeconomics," Books, Edward Elgar Publishing, number 14327.
    14. Nicoletta Corrocher & Lucia Cusmano, 2014. "The 'KIBS Engine' of Regional Innovation Systems: Empirical Evidence from European Regions," Regional Studies, Taylor & Francis Journals, vol. 48(7), pages 1212-1226, July.
    15. Giulio Bottazzi & Angelo Secchi & Federico Tamagni, 2014. "Financial constraints and firm dynamics," Small Business Economics, Springer, vol. 42(1), pages 99-116, January.
    16. Andy Pike & Jane Pollard, 2010. "Economic Geographies of Financialization," Economic Geography, Clark University, vol. 86(1), pages 29-51, January.
    17. Hans Degryse & Steven Ongena, 2005. "Distance, Lending Relationships, and Competition," Journal of Finance, American Finance Association, vol. 60(1), pages 231-266, February.
    18. Unknown, 2003. "Current Information: Dissertation Abstracts," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 0(Number 1), pages 1-2.
    19. Ferkingstad, Egil & Løland, Anders & Wilhelmsen, Mathilde, 2011. "Causal modeling and inference for electricity markets," Energy Economics, Elsevier, vol. 33(3), pages 404-412, May.
    20. Enrico Moretti & Per Thulin, 2013. "Local multipliers and human capital in the United States and Sweden," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 339-362, February.
    21. Fixler, Dennis J. & Siegel, Donald, 1999. "Outsourcing and productivity growth in services," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 177-194, June.
    22. Bikker, J.A. & Metzemakers, P.A.J., 2005. "Bank provisioning behaviour and procyclicality," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 15(2), pages 141-157, April.
    23. Claudio Borio & Craig Furfine & Philip Lowe, 2001. "Procyclicality of the financial system and financial stability: issues and policy options," BIS Papers chapters,in: Bank for International Settlements (ed.), Marrying the macro- and micro-prudential dimensions of financial stability, volume 1, pages 1-57 Bank for International Settlements.
    24. Henderson, J. Vernon & Ono, Yukako, 2008. "Where do manufacturing firms locate their headquarters?," Journal of Urban Economics, Elsevier, vol. 63(2), pages 431-450, March.
    25. Tom Broekel & Martin Binder, 2007. "The Regional Dimension of Knowledge Transfers—A Behavioral Approach," Industry and Innovation, Taylor & Francis Journals, vol. 14(2), pages 151-175.
    26. Castellacci, Fulvio, 2008. "Technological paradigms, regimes and trajectories: Manufacturing and service industries in a new taxonomy of sectoral patterns of innovation," Research Policy, Elsevier, vol. 37(6-7), pages 978-994, July.
    27. Unknown, 2003. "Current Information: Dissertation Abstracts," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 0(Number 2), pages 1-3.
    28. Muller, Emmanuel & Zenker, Andrea, 2001. "Business services as actors of knowledge transformation: the role of KIBS in regional and national innovation systems," Research Policy, Elsevier, vol. 30(9), pages 1501-1516, December.
    29. Wouter Jacobs & Hans R. A. Koster & Frank van Oort, 2014. "Co-agglomeration of knowledge-intensive business services and multinational enterprises," Journal of Economic Geography, Oxford University Press, vol. 14(2), pages 443-475.
    30. Frank Neffke & Martin Svensson Henning, 2009. "Skill-relatedness and firm diversification," Papers on Economics and Evolution 2009-06, Philipps University Marburg, Department of Geography, revised Oct 2010.
    31. Ono, Yukako, 2003. "Outsourcing business services and the role of central administrative offices," Journal of Urban Economics, Elsevier, vol. 53(3), pages 377-395, May.
    32. Mitchell A. Petersen & Raghuram G. Rajan, 2002. "Does Distance Still Matter? The Information Revolution in Small Business Lending," Journal of Finance, American Finance Association, vol. 57(6), pages 2533-2570, December.
    33. Fernando Merino & Luis Rubalcaba, 2013. "Are Knowledge-intensive Services Highly Concentrated? Evidence from European Regions," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 104(2), pages 215-232, April.
    34. Sumit Agarwal, 2010. "Distance and Private Information in Lending," Review of Financial Studies, Society for Financial Studies, vol. 23(7), pages 2757-2788, July.
    35. Almas Heshmati, 2003. "Productivity Growth, Efficiency and Outsourcing in Manufacturing and Service Industries," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 79-112, February.
    36. Binder, Jan & Schwengler, Barbara, 2006. "Neuer Gebietszuschnitt der Arbeitsmarktregionen im Raum Berlin und Brandenburg : kritische Überprüfung der bisher gültigen Arbeitsmarktregionen und Vorschläge für einen Neuzuschnitt," IAB-Forschungsbericht 200604, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    37. Consoli, Davide & Elche-Hortelano, Dioni, 2010. "Variety in the knowledge base of Knowledge Intensive Business Services," Research Policy, Elsevier, vol. 39(10), pages 1303-1310, December.
    38. Carolina Castaldi & Sandro Sapio, 2008. "Growing like mushrooms? Sectoral evidence from four large European economies," Journal of Evolutionary Economics, Springer, vol. 18(3), pages 509-527, August.
    39. Alessio Moneta & Doris Entner & Patrik O. Hoyer & Alex Coad, 2013. "Causal Inference by Independent Component Analysis: Theory and Applications," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(5), pages 705-730, October.
    40. Alex Coad, 2010. "Exploring the processes of firm growth: evidence from a vector auto-regression," Industrial and Corporate Change, Oxford University Press, vol. 19(6), pages 1677-1703, December.
    41. Joshua D. Coval & Tobias J. Moskowitz, 1999. "Home Bias at Home: Local Equity Preference in Domestic Portfolios," Journal of Finance, American Finance Association, vol. 54(6), pages 2045-2073, December.
    42. Miozzo, Marcela & Grimshaw, Damian, 2005. "Modularity and innovation in knowledge-intensive business services: IT outsourcing in Germany and the UK," Research Policy, Elsevier, vol. 34(9), pages 1419-1439, November.
    43. Andreas Koch & Thomas Stahlecker, 2004. "Regional innovation systems and the foundation of knowledge intensive business services. A comparative study in Bremen, Munich, and Stuttgart, Germany," European Planning Studies, Taylor & Francis Journals, vol. 14(2), pages 123-146, November.
    44. Brock, W A, 1999. "Scaling in Economics: A Reader's Guide," Industrial and Corporate Change, Oxford University Press, vol. 8(3), pages 409-446, September.
    45. Valentina Meliciani & Maria Savona, 2015. "The determinants of regional specialisation in business services: agglomeration economies, vertical linkages and innovation," Journal of Economic Geography, Oxford University Press, vol. 15(2), pages 387-416.
    46. James H. Stock & Mark W. Watson, 2001. "Vector Autoregressions," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 101-115, Fall.
    47. Stolz, Stéphanie & Wedow, Michael, 2011. "Banks' regulatory capital buffer and the business cycle: Evidence for Germany," Journal of Financial Stability, Elsevier, vol. 7(2), pages 98-110, June.
    48. Matthias Buerger & Tom Broekel & Alex Coad, 2012. "Regional Dynamics of Innovation: Investigating the Co-evolution of Patents, Research and Development (R&D), and Employment," Regional Studies, Taylor & Francis Journals, vol. 46(5), pages 565-582, August.
    49. Matthias Duschl & Thomas Brenner, 2013. "Characteristics of regional industry-specific employment growth rates' distributions," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 249-270, June.
    50. Thomas J. Sargent, 1979. "Estimating vector autoregressions using methods not based on explicit economic theories," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sum.
    51. Britta Klagge & Ron Martin, 2005. "Decentralized versus centralized financial systems: is there a case for local capital markets?," Journal of Economic Geography, Oxford University Press, vol. 5(4), pages 387-421, August.
    52. Peter Wood, 2006. "Urban Development and Knowledge-Intensive Business Services: Too Many Unanswered Questions?," Growth and Change, Wiley Blackwell, vol. 37(3), pages 335-361.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elche,Dioni & Consoli, Davide & Sánchez-Barrioluengo, Mabel, 2017. "From brawn to brains: manufacturing-KIBS interdependency," INGENIO (CSIC-UPV) Working Paper Series 201701, INGENIO (CSIC-UPV).

    More about this item

    Keywords

    Forecasting and Prediction Methods; Simulation Methods ; Technological Change: Choices and Consequences; Diffusion Processes; General Regional Economics (includes Regional Data);

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unm:umagsb:2015029. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Leonne Portz). General contact details of provider: http://edirc.repec.org/data/meteonl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.