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The Importance of Creative Services Firms in Explaining the Wealth of European Regions

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Service Industries and Regions

Part of the book series: Advances in Spatial Science ((ADVSPATIAL))

Abstract

This chapter shows the important impact that a specific set of services, those belonging to the creative industries, have on regional economic development and wealth generation. Creative industries are a set of knowledge-based activities focused on the generation of meaning, contents and aesthetic attributes through the use of creativity, skill and talent, and have the potential to create wealth from trade and intellectual property rights. A key hypothesis in this paper is that creative services firms are a “growth driver” that promotes wealth in the regions where they are located. This is due to the fact that firms in creative industries introduce new ideas that are subsequently transferred to other firms of the economy, increasing the output of the whole economy. The objective of the research is to provide causal evidence of the impact of creative services on regional wealth.

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Notes

  1. 1.

    In the latest classifications of activities (ISIC Rev.3.1 and NACE Rev.2) the only creative industries classified as manufacturing belong to the “fashion” sector, which is commonly assimilated to clothing and footwear industries. Within these industries it is difficult to separate those firms that focus on the intangible part (fashion design) from those more addressed to bulk production and, in many cases, a firm performs both activities.

  2. 2.

    A detailed review of the literature on creative industries exceeds the scope of this paper. Good critical surveys can be found in UNCTAD (2010), O’Connor (2007) and Flew and Cunningham (2010).

  3. 3.

    Strictly speaking, some concrete creative services, such as for example cultural retail, are in practice assigned by Eurostat to the “less-knowledge-intensive group” (LKIS).

  4. 4.

    We intentionally avoid discussing how the notion of creative industries conceptually relates to regarding other concepts such as cultural industries or arts, as well as to different taxonomies. This discussion is addressed in Pratt (2007) and UNCTAD (2010). The justifications for our use of the UNCTAD taxonomy are that it is derived from a broad and rigorous debate about an appropriate taxonomy, and that it is more comprehensive than single country based taxonomies such as that of DCMS (2009). Two thirds of the creative industries are shared among the various taxonomies so that, in this sense, the empirical differences are moderate.

  5. 5.

    If creative manufacturing is estimated separately it exhibits an average negative impact on regional wealth. However, that does not change the evidence and implications of the general results.

  6. 6.

    The countries for which data was not available, such as Greece, Luxembourg and Malta, were not included. Data for the year 2001 have also been used for the design of the exogenous instrumental variables.

  7. 7.

    We refer to Lazzeretti et al. (2012) for the detail in the elaboration of the variables used as instruments.

  8. 8.

    This does not mean actually that the variable is exogenous, only that their effects on the consistency of the estimates are not relevant. In this case, OLS produce the best linear unbiased estimator.

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Acknowledgements

The authors would like to thank Ministry of Science and Innovation and Universitat Politècnica de València (Spain) for financially supporting this research (ECO2010-17318 MICINN Project and Research Project n. 2677-UPV). We also would like to thank an anonymous referee and Frank Pyke by their valuable comments.

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Authors and Affiliations

  1. Department of Economic Structure, University of Valencia, Valencia, Spain

    Rafael Boix

  2. Department of Business Organisation, Politecnic University of Valencia, Valencia, Spain

    Blanca De-Miguel-Molina & José Luis Hervas-Oliver

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  1. Rafael Boix
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  2. Blanca De-Miguel-Molina
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  3. José Luis Hervas-Oliver
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Correspondence to Rafael Boix .

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  1. , Applied Economics, University of Alcala - Madrid, Plaza Victoria 2, Alcalá de Henares, 28802, Spain

    Juan R. Cuadrado-Roura

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Boix, R., De-Miguel-Molina, B., Hervas-Oliver, J.L. (2013). The Importance of Creative Services Firms in Explaining the Wealth of European Regions. In: Cuadrado-Roura, J. (eds) Service Industries and Regions. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-35801-2_16

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  • DOI: https://doi.org/10.1007/978-3-642-35801-2_16

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