This paper analyses the location patterns o f knowledge-intensive business services (KIBS) in Europe in line with the most recent literature. Our main contribution is to provide new evidence about the location patterns o f KIBS considering the European continent, asopposed to individual countries, as the unit o f analysis. We first present the concentration and specialisation patterns o f KIBS activities in Europe, including the variations that have occurred during the last few years. Second, we try to provide an explanation o f KIBS regional specialisation patterns on the basis of the factors identified by the literature. The results suggest that KIBS activities are highly geographically concentrated in Europe.
In this respect, capital cities, which have increasingly emerged as strongly specialised locations in services, play a central role in geography o f KIBS. At the same time, there is also evidence o f a tendency o f sparse dispersal o f KIBS throughout European regions.Overall, our results reinforce the importance o f agglomeration externalities, market size, regional accessibility, regional knowledge base, and the institutional nature o f the regional capital city. Finally, regarding changes in KIBS regional specialisation, we find that these are largely associated to changes in regional GDP.A long-standing debate exists around the location patterns o f production activities and, in particular, about the location o f new and em erging production activities. The m ajority o f studies on these aspects have m ainly concentrated on m anufacturing rather than on service activities; how ever, for obvious reasons, the interest in the latter has increased over time. W ith this w ork, w e aim to investigate the location patterns o f know ledge-intensive business services (KIBS). These activities are o f critical im portance w ith respect to the recent dynam ics o f the production system , as m uch for its increasing volum e o f value added and em ploym ent as w ell as for its key function in the creation and diffusion o f know ledge and innovation to other activities. K IB S appears to be im portant not only for the industrial sector but also for the services or tertiary sector. Similarly, KIBS are relevant to both private and public com panies. Furtherm ore, specialised services provide a flow o f know ledge to their clients, and their functions allow the reduction o f risks and opportunity costs in the processes o f innovation, proportioning know ledge on different subjects such as governm ental regulation, standards, m arketing, engineering, and financing.The existing literature show s that KIBS are highly concentrated in m etropolitan areas and, particularly, in capital cities. In E urope this is show n by num erous studies (C avola and M artinelli