INTERREGIONAL TRADE IN PRODUCER SERVICES - REVIEW AND SYNTHESIS

This paper reviews some of the past decade's studies of producer or intermediate-services exports from local regions. After a discussion of conceptual and methodological problems and inconsistencies, we present these studies according to the three basic methodologies: surveys, location quotients, and input-output. Overall, our sense is that these studies support limited but important conclusions: (1) If intermediate services are defined broadly, certain of these activities have as their major function interregional or international transfer or trade. By nature, these distributive services have widespread clients, and benefit from locations with substantial physical and communications infrastructure. (2) Among most business- and financial-service activities, most offices are established to serve a local region, but may derive some revenues from beyond this expected zone. (3) The exceptions -the activities and establishments that derive much of their revenue beyond such "normal" zones-are particularly specialized, particularly large, or parts of multi-regional enterprises. (4) Such firms tend to locate in larger or more specialized urban places, probably because of the labor force, the corporate connections, and the rapid dissemination of ideas, contacts, and information within and among the largest metropolitan areas. These conclusions lead to some general policy recommendations.