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Culturally Clustered or in the Cloud? Location of Internet Start-ups in Berlin

Kristoffer Moeller

SERC Discussion Papers from Centre for Economic Performance, LSE

Abstract: Knowledge based firms like IT companies do neither have a capital- nor a land intensive production. They predominantly rely on qualified labour and increasingly depend on the location of its (potential) employees. This implies that it is more likely that firms follow workers rather than the other way around. Contributing to the literature of firm location and consumer cities I empirically test the amenity oriented firm location hypothesis. In particular I investigate whether Berlin internet start-up firms, representing a footloose knowledge-based service industry, locate in urban amenity-rich places. Identification builds on the sudden fall of the Berlin Wall. The intra-city analysis yields a significant impact of urban amenities on the location of internet start-up. A comparison with other service industries suggests that amenities are significant to the location choice of creative sectors whereas no effect can be observed for non-creative firms.

Keywords: Firm location; urban amenities; consumer city; internet start-ups; entrepreneurs; Berlin (search for similar items in EconPapers)
JEL-codes: D22 L26 R30 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent, nep-eur, nep-geo, nep-ict, nep-sbm and nep-ure
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Working Paper: Culturally clustered or in the cloud? location of internet start-ups in Berlin (2014) Downloads
Working Paper: Culturally clustered or in the cloud? Location of internet start-ups in Berlin (2013) Downloads
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