Open Access Article SciPap-918
The Role of Agglomeration Economies in the Employment Growth in the Knowledge Intensive Services
by Slávka Klasová 1,*

1 Faculty of Economics, Department of Regional Sciences and Management, Technical University of Košice, Němcovej 32, Košice 04001, Slovakia

* Authors to whom correspondence should be addressed.

Abstract: The paper investigates the impact of agglomeration economies on the regional employment growth in the knowledge intensive services (KIS) in Slovakia over the period 1998 to 2014 by estimating spatial econometric models. Assuming that knowledge spillovers and externalities are stronger between industries with shared knowledge bases and complementarities, we analyse the role of different forms of sectoral variety at the district level in Slovakia. Results indicate that localization economies has a generally negative impact on the employment growth in the KIS sector, however the results show a strong evidence of the beneficial effect of related variety, while no role is played by unrelated variety. When looking at knowledge spillover between KIS and manufacturing, the KIS industry is affected by related variety in manufacturing industry, while no evidence of externalities is found from the tertiary sectors to manufacturing. The results question the merits of interventions promoting regional specialisation and emphasise that diversity into the related industries should be one of the policy issue areas.

Keywords: Slovakia, Agglomeration Economies, Employment Growth, Knowledge Intensive Services, Spatial Distribution

JEL classification:   D62 - Externalities,   O18 - Urban, Rural, Regional, and Transportation Analysis • Housing • Infrastructure,   O52 - Europe,   R12 - Size and Spatial Distributions of Regional Economic Activity

SciPap 2018, 26(1), 918

Received: 29 August 2017 / Accepted: 4 January 2018 / Published: 5 April 2018