A dynamic approach to the tendency of industries to cluster

producer services thrive in urban regions. By this token, they seem to be attracted to
economic milieus in which urbanization economies are present. In addition, it may be
noted that only 14 out of the 81 functional regions had a larger share of the employment
in the producer service sector than in the manufacturing sector.

In Table 3.1. the correlation coefficient between (i) producer service and
manufacturing employment and (ii) producer service employment per employed in
manufacturing. Also, the mean producer service employment per employed in the
manufacturing is presented. All figures are across the 81 functional regions.

Table 3.1. Correlation coefficients and mean producer service employment per employed in manufacturing in
2000.

*) Denotes significance at the 0.01 level.

**) Standard deviation of the mean presented within brackets.

As should be expected from an inspection of Figure 3.1., there is a high correlation
between producer service employment and manufacturing employment. Thus, a high
employment in manufacturing implies a high employment in producer services. It is also
evident that the higher the employment in manufacturing in a region, the more producer
service provision per employed in manufacturing. Since both producer service and
manufacturing employment increase with population, this reflects that producer services
employment rise disproportionably with respect to manufacturing employment as the
population rises. From the mean figure, it can be seen that there are on average twice as
many employed in manufacturing compared to producer services. However, the figure
varies greatly across the regions. The minimum value is 0.11 while the maximum value is
2.34. The size of the standard deviation is also large compared to the mean. The overall
pattern is that there are more employed in manufacturing than in producer services. 9 out
of the 81 regions have a higher producer service employment than manufacturing
employment.

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