2015/27 | LEM Working Paper Series | |
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Causal Relations between Knowledge-Intensive Business Services and Regional Employment Growth |
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Thomas Brenner, Marco Capasso, Matthias Duschl, Koen Frenken, Tania Treibich |
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Keywords | ||
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Employment growth; growth spillovers; KIBS; industrial dynamics; financial geography
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JEL Classifications | ||
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C53, O33, R10
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Abstract | ||
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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.
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