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Agglomeration Dynamics of Business Services
KTH, School of Industrial Engineering and Management (ITM), Centres, Centre of Excellence for Science and Innovation Studies, CESIS. KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Economics.
2008 (English)Report (Other academic)
Abstract [en]

A major characteristic of the economic development in European and North America duringthe past 10-15 years is a fast expansion of the producer-service sector. This paper considersthe location dynamics of two categories of firms: contact-intensive producer-service suppliersand other firms, where the latter form the rest of the economy. Urban regions are decomposedinto urban areas, and the latter into zones. In the theoretical framework firms have randomchoicepreferences 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-regionalaccess to market demand. This leads to a non-linear system that over time generatescumulative change processes of growth and decline. The econometric analysis makes use ofinformation about time distances between zones in urban areas as well as between urban areasin the same agglomeration and between urban areas in different agglomerations. Thisinformation is employed in an econometric model that depicts for each urban area how thenumber of jobs in different sectors change in response to the access to customers’ purchasingpower in the entire set of urban areas. The estimation results show that the cumulative changeprocesses feature non-linear behaviour.

Place, publisher, year, edition, pages
CESIS, KTH Royal Institute of Technology , 2008. , 20 p.
CESIS Working Paper Series in Economics and Institutions of Innovation, 153
Keyword [en]
Agglomeration, business services, accessibility, non-linear
National Category
URN: urn:nbn:se:kth:diva-70257OAI: diva2:486130
QC 20120208Available from: 2012-02-08 Created: 2012-01-30 Last updated: 2012-02-08Bibliographically approved

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Johansson, Börje
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