Culturally Clustered or in the Cloud? How Amenities Drive Firm Location Decision in Berlin

31 Pages Posted: 20 Sep 2018

Date Written: September 2018

Abstract

Creative firms are neither capital‐ nor land‐intensive in production. They predominantly rely on creative and specialized labor and, assuming a strong competition for workers, are therefore increasingly dependent on the location of their (potential) employees. If these creative and highly qualified employees are attracted by consumption amenities such as bars, clubs, and restaurants, then it follows that these same amenities may determine the location of creative service firms. I investigate this hypothesis by examining whether Berlin Internet start‐up firms locate in urban amenity‐rich places. Identification builds on the fall of the Berlin Wall. A 1 percent increase in amenity density raises the probability of a start‐up location by almost 2 percent. 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 nonreative firms.

Keywords: Berlin, consumer city, creative class, creative firms, firm location, Internet start‐ups, urban amenities

Suggested Citation

Moeller, Kristoffer, Culturally Clustered or in the Cloud? How Amenities Drive Firm Location Decision in Berlin (September 2018). Journal of Regional Science, Vol. 58, Issue 4, pp. 728-758, 2018, Available at SSRN: https://ssrn.com/abstract=3252086 or http://dx.doi.org/10.1111/jors.12383

Kristoffer Moeller (Contact Author)

Darmstadt University of Technology ( email )

Universitaets- und Landesbibliothek Darmstadt
Magdalenenstrasse 8
Darmstadt, Hesse D-64289
Germany

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