Can a knowledge-based cluster be created? The case of the Barcelona 22@district

Abstract

The aim of this paper is to track the location decisions of knowledge-intense firms in a redeveloped urban district in the city of Barcelona in which government policy has promoted the formation of a cluster of knowledge-based activities. After decades of economic and industrial stagnation in a district called Poblenou, in the year 2000 the City Council of Barcelona implemented a plan to renew the area's urban and economic structure. Under the development plan, knowledge-based firms were encouraged to set up in the area creating a cluster of Advanced activities. This paper examines the success of this local policy and aims to determine whether cluster amenities have played a part in attracting knowledge-based activities. First, we evaluate the cluster implementation via a differences-in-differences analysis comparing the increase in the number of knowledge-based firms in this specific area with the increase of this kind of firm elsewhere in the city and the metropolitan area. Second, to test whether cluster amenities are determinant factors for the location of knowledge-based firms, we perform a multivariate regression analysis explaining intra-city firm location at the ZIP code level. Data about new firms come from a business-census that contains detailed information about location determinants of these firms as well as their characteristics.