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The interaction between knowledge-intensive business services and urban economy

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  • Seungil Yum

    (University of Florida)

Abstract

While the importance of knowledge-intensive business services (KIBS) has been rapidly growing in our knowledge-based era, most studies have analyzed KIBS in European countries. This study highlights the spatial patterns and economic impacts of KIBS in the US Metropolitan Statistical Areas (MSAs) by employing a new cluster quotient (CQ) index and Seemingly Unrelated Regression model. First, this study finds that Washington, DC, plays an important role in KIBS clusters and the CQ index would be a better index than the location quotient (LQ) index for measuring the magnitude of clusters given that LQ cannot consider the agglomeration of industries into its index. Second, this study highlights that KIBS and the GDP positively interact with each other. For example, the GDP shows an elasticity of 0.084 for KIBS, and KIBS exert an impact on the GDP with an elasticity of 0.515. The findings suggest that KIBS can be an economic driver for the US MSAs, and urban practitioners should develop policies for KIBS to promote regional economic growth.

Suggested Citation

  • Seungil Yum, 2019. "The interaction between knowledge-intensive business services and urban economy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(1), pages 53-83, August.
    • Handle: RePEc:spr:anresc:v:63:y:2019:i:1:d:10.1007_s00168-019-00920-3
    DOI: 10.1007/s00168-019-00920-3
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    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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