Arbeitspapier
Geographic Concentration of Business Services Firms: A Poisson Sorting Model
This paper examines the effects of specialisation (within-sector clustering) and diversity (between-sector clustering) on business services profitability and location choice. We apply a semiparametric Poisson sorting model allowing for firm-specific effects. We find that for most firms, profitability of business services firms is substantially higher close to specialised clusters of business services firms. A standard deviation increase in business services specialisation leads to on average a 40 percent increase in the probability that a business services firm locates there, supporting theories of Marshall, Arrow and Romer. It is also profitable for most business services firms to locate near a group of firms that belong to the same sector, not necessarily business services firms, so diversity is negatively related to location decisions. Almost all firms either benefit from within-sector clustering or between-sector clustering. Within-sector clusters are particularly profitable for large mature firms, whereas between-sector clusters are relatively more profitable for smaller innovative firms.
- Language
-
Englisch
- Bibliographic citation
-
Series: Tinbergen Institute Discussion Paper ; No. 11-085/3
- Classification
-
Wirtschaft
Size and Spatial Distributions of Regional Economic Activity
Land Use Patterns
Real Estate Markets, Spatial Production Analysis, and Firm Location: Other
- Subject
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Sorting
Agglomeration Economies
Specialisation
Diversity
Heterogeneity
Semiparametric Estimation
Regionales Cluster
Dienstleistungssektor
Betriebliche Standortwahl
Regionalökonomik
- Event
-
Geistige Schöpfung
- (who)
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Koster, Hans
van Ommeren, Jos N.
Rietveld, Piet
- Event
-
Veröffentlichung
- (who)
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Tinbergen Institute
- (where)
-
Amsterdam and Rotterdam
- (when)
-
2011
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Koster, Hans
- van Ommeren, Jos N.
- Rietveld, Piet
- Tinbergen Institute
Time of origin
- 2011
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