Xavier Vence Deza

Regional concentration of knowledge-intensive business services in Europe

This paper analyses the location patterns of knowledge-intensive business services (KIBS) in Europe in line with the most recent literature. Our main contribution is to provide new evidence about the location patterns of KIBS considering the European continent, as opposed to individual countries, as the unit of analysis. We first present the concentration and specialisation patterns of KIBS activities in Europe, including the variations that have occurred during the last few years. Second, we try to provide an explanation of KIBS regional specialisation patterns on the basis of the factors identified by the literature. The results suggest that KIBS activities are highly geographically concentrated in Europe. In this respect, capital cities, which have increasingly emerged as strongly specialised locations in services, play a central role in geography of KIBS. At the same time, there is also evidence of a tendency of sparse dispersal of KIBS throughout European regions. Overall, our results reinforce the importance of agglomeration externalities, market size, regional accessibility, regional knowledge base, and the institutional nature of the regional capital city. Finally, regarding changes in KIBS regional specialisation, we find that these are largely associated to changes in regional GDP.