Geographic concentration and vertical disintegration in KIBS: evidence from the metropolitan area of Milan

In this paper we estimate the effects of spatial agglomeration on KIBS vertical disintegration with reference to the metropolitan area of Milan. Relying on a rich firm-level dataset, we first geo-referenciate each KIBS firm by employing a GIS routine; then we define a set of distance-based density indicators counting the number of neighbouring firms located within a series of concentric rays from each KIBS firm location. Our estimates show that KIBS tend to be more disintegrated as the number of neighbouring firms increases, without showing any clear process of spatial decay within 5 kilometres. We also find that this result is particularly strong for creative KIBS, whereas the correlation for traditional professional and technology-related ones is weaker