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Do creative industries generate multiplier effects? Evidence from UK cities 1997-2018

Gutierrez-Posada, Diana; Kitsos, Tasos; Nathan, Max; Nuccio, Massimiliano; (2021) Do creative industries generate multiplier effects? Evidence from UK cities 1997-2018. (PEC Discussion Paper 2021/07). Creative Industries Policy & Evidence Centre: London, UK. Green open access

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Abstract

The creative industries have received much attention from economic geographers and others, both for their propensity to co-locate in urban settings and their potential to drive urban economic development. However, evidence on the latter is surprisingly sparse. In this paper we explore the long-term, causal impacts of the creative industries on surrounding urban economies. Adapting Moretti’s local multipliers framework, we build a new 20-year panel of UK cities, using fixed effects and a historic instrument to identify effects on non-creative firms and employment. We find that each creative job generate at least 1.9 non-tradable jobs between 1998 and 2018: this is associated with creative business services employees’ local spending, rather than visitors to urban amenities such as galleries and museums. We do not find the same effects for workplaces, and find no causal evidence for spillovers from creative activity to other tradable sectors, findings consistent with descriptive evidence on the increasing concentration of creative industries in a small number of cities. Given the small numbers of creative jobs in most cities, however, the overall effect size of the creative multiplier is small, and shapes only a small part of non-tradable urban employment change. Overall, our results suggest creative economy-led policies for cities can have positive – albeit partial – local economic impacts.

Type: Working / discussion paper
Title: Do creative industries generate multiplier effects? Evidence from UK cities 1997-2018
ISBN-13: 978-1-913095-42-0
Open access status: An open access version is available from UCL Discovery
Publisher version: https://pec.ac.uk/discussion-papers/do-creative-in...
Language: English
Additional information: This is an Open Access article published under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) Licence (https://creativecommons.org/licenses/by-nc-sa/4.0/).
Keywords: Creative industries, local multipliers, cities, economic development
UCL classification: UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Centre for Advanced Spatial Analysis
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL
URI: https://discovery.ucl.ac.uk/id/eprint/10148486
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