This paper models the concentration of computer services activity across theU.S.with factors that incorporate spatial relationships. Specifically, we enhance the standard home-area study with an analysis that allows conditions in neighboring counties to affect the concentration of employment in the home county. We use county-level data for metropolitan areas between 1990 and 1997. To measure change in employment concentration, we use the change in location quotients for SIC 737, which captures employment concentration changes due to both the number of firms and the scale of their activity relative to the national average. After controlling for local demand for computer services, our results support the importance of the presence of a qualified labor supply, inter-industry linkages, proximity to a major airport, and spatial processes in explaining changes in computer services employment concentration, while finding little support for the influence of cost factors. Our enhanced model reveals inter-jurisdictional relationships among these metro counties that could not be captured with standard estimates by state, MSA or county. Using counties within MSAs, therefore, provides more general results than case studies, but still allows measurement of local interactions.
Grimes, Donald; Walker, Mary Beth; and Prime, Penelope B., "Change in the Concentration of Employment in Computer Services: Spatial Estimation at the U.S. Metro County Level" (2006). International Business Faculty Publications. 27.