Creative Professionals, Local Amenities and Externalities: Do Regional Concentrations of Creative Professionals Reinforce Themselves Over Time?

Abstract

This research analyses the impact of the creative sector on total employment and on the creative sector's employment growth in Western Germany's regions from 1977 to 2004. For the analysis, the definitions of the creative sector follow a technologically and culturally oriented definition and, alternatively, Florida's creative class (2002). These approaches are contrasted with a skill-based approach. Using a fixed-effects panel model with time lags, the results support the view that the creative sector fosters the regional growth rate of total employment. The results suggest, moreover, that an initially large share of regional creative professionals pushes the regional concentration of those professions in agglomerated regions further. The driving force behind the concentration of creative professionals is local amenities—measured by bohemians—and it is assumed that knowledge spillovers—possibly accelerated by diversity and close proximity—contribute to this polarization. These results are also confirmed for highly skilled agents.

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