D espite decades of job suburbanization, employment in producer services remains highly concentrated in central cities. In explaining these spatial patterns, theorists have long argued that producer services, and information-intensive industries more generally, remain bound to the central city by agglomeration economies unique to the urban core. Critics dispute this view on two fronts. On one hand, there are those who challenge the traditional notion that the benefits of spatial clustering are confined to the urban core. On the other are those who contend that the importance of spatial proximity and face-to-face interaction has been overstated in determining where producer service establishments locate.Why do producer services cluster in central cities? How significant are spatial proximity and the need for face-to-face interaction in explaining intrametropolitan location? This article investigates these questions via a locational analysis of the public accounting industry in the Chicago and Minneapolis-St. Paul metropolitan regions. Relying on a telephone survey of public accounting offices and interviews with public accounting executives and industry experts, this research seeks to understand the factors that drive location decisions of public accounting offices and explain why public accounting employment clusters in central cities. Additionally, to the extent that spatial proximity to clients, collaborators, suppliers, and subcontractors is important in location decisions, this study seeks to unpack the spatial character or "reach" of agglomeration economies and determine how close is close enough.Although this research focuses on the public accounting industry, findings are useful in understanding the intrametropolitan locational dynamics of other informationintensive industries. Understanding the key locational determinants of such activities, particularly those over which planners and policy makers exercise some control, is essential in guiding local and regional economic development. Additionally, findings will advance our understanding of the economic interdependencies of cities and suburbs and help to determine if agglomeration economies represent a competitive advantage of central cities. Identifying and building on competitive advantages is essential if
AbstractThis article investigates the unique locational attributes central cities are purported to have and the importance of agglomeration economies in intrametropolitan site selection via a locational analysis of the public accounting industry in the Chicago and Minneapolis-St. Paul regions. Relying on data from a telephone survey of public accounting offices and interviews with public accounting executives and industry experts, findings suggest that the agglomeration argument has been overstated in explaining the industry's location and that the traditional conception of agglomeration economies as confined to the urban core is spatially restrictive.