Causal Relations between Knowledge-Intensive Business Services and Regional Employment Growth

Thomas Brenner (), Marco Capasso, Matthias Duschl, Koen Frenken and Tania Treibich

No 1534, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

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.

Keywords: Employment growth; growth spillovers; KIBS; industrial dynamics; financial geography (search for similar items in EconPapers)
Date: 2015-10, Revised 2015-10
New Economics Papers: this item is included in nep-ino and nep-mac
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http://econ.geo.uu.nl/peeg/peeg1534.pdf Version September 2015 (application/pdf)

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Working Paper: Causal Relations between Knowledge-Intensive Business Services and Regional Employment Growth (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:1534

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