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Agglomeration of knowledge intensive business services and urban productivity
Author(s) -
Zhang Cui
Publication year - 2016
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12204
Subject(s) - economies of agglomeration , productivity , economic geography , business , urban agglomeration , industrial organization , economics , economic growth
While there is considerable empirical evidence on the productivity‐enhancing effects of manufacturing agglomeration, the impacts of knowledge intensive business services (KIBS) agglomeration have rarely been examined. We propose a mechanism‐based framework to study the precise channels through which KIBS agglomeration contributes to urban productivity. By estimating a model of urban productivity that incorporates agglomeration of manufacturing, KIBS and non‐KIBS using city‐level data from China, we find that KIBS agglomeration is an important source of aggregate urban productivity. The importance of KIBS agglomeration in city productivity growth is systematically related to a city's level of economic development.