What drives ICT clustering in European cities?

Abstract

ICT clusters have attracted much attention because of their rapid growth and their value for other economic activities. Using a nested multi-level model, we examine how conditions at the country level and at the city level affect ICT clustering activity in 227 cities across 22 European countries. We test for the influence of three country regulations (starting a business, registering property, enforcing contracts) and two city conditions (proximity to university, network density) on ICT clustering. We consider heterogeneity within the sector and study two types of ICT activities: ICT product firms and ICT content firms. Our results indicate that country conditions and city conditions each have idiosyncratic implications for ICT clustering, and further, that these can vary by activities in ICT products or ICT content manufacturing.

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Notes

  1. 1.

    For example, a European Commission report indicated that initiatives on licensing procedures are based on the assumption that simplification in licensing procedures leads to the creation of more firms (2011: Introduction).

  2. 2.

    Lichtenstein and Austria were dropped from both samples as only one city per country observation was available. The higher number of Eastern European cities in the ICT product sample could be explained by relocation effects (Manolova et al., 2008).

  3. 3.

    NACE stands for "Nomenclature Generale des Activites Economiques dans I`Union Europeenne" and is the European standard for industry classification, introduced in 1970. The most recent version (2008) is based on International Standard Industrial Classification (ISIC) of the United Nations for economic activities. Of eight aggregated sectors, two (construction; ICT and other services) were dropped to avoid perfect multicollinearity.

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Acknowledgments

We thank Zoltan Acs, David Audretsch and participants of the 2013 Transatlantic Policy Consortium.

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Correspondence to Sameeksha Desai.

Appendices

Appendix 1

See Table 4.

Table 4 Distribution of an average number of ICT content and ICT product manufacturers per 1000 firms registered in countries (2004–2009)

Appendix 2

See Table 5.

Table 5 Cities and countries included in this study

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Belitski, M., Desai, S. What drives ICT clustering in European cities?. J Technol Transf 41, 430–450 (2016). https://doi.org/10.1007/s10961-015-9422-y

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Keywords

  • ICT
  • Clustering
  • Europe
  • Policy
  • Multi-level
  • Urban

JEL Classification

  • R110
  • R120
  • L00