Business services location and market factors in major European cities

Business services are economic activities closely linked to urban hierarchies. They have a propensity to be concentrated in cities where certain conditions are given. This paper explores the location of business services in major European cities and focuses on the role of market factors as determinants. It is based mainly on Eurostat Urban Audit data for 51 European cities. The results confirm both a hierarchical concentration of business services and the need for a comprehensive and multidimensional approach to explanatory market factors, including demand, supply and reputation components. The most important determinants are related to business demand, urban agglomeration, accessibility and institutional frameworks. Demand-oriented factors have the strongest explanatory power, although supply factors also play a significant role.

► Business services are economic activities closely linked to urban hierarchies.
► A multidimensional approach is developed to explain the location factors.
► Demand, supply and reputation factors of cities are considered in the model.
► Four dimensions have the greatest explanatory power in the model.
► They are market maturity, urban agglomeration, accessibility, institutional framework.