Intra-urban location of foreign and domestic knowledge-intensive business service firms in Belgrade

Abstract

While it is widely acknowledged that foreign investments in knowledge-intensive business services (KIBS) play an important role in reshaping the economy and spatial structure of many postsocialist cities, there is a lack of research on their intra-urban locational behaviour, particularly in comparison with domestic investments in the same sector. This analysis is focused on the underlying factors that shape both foreign and domestic KIBS firms’ location choices in Belgrade, a city facing dynamic restructuring induced by the complexity of the postsocialist transition. For the modelling KIBS intra-urban location choices, this study uses disaggregated micro-geographic data on firms opened during 2011-2019 period. The findings suggest that domestic and foreign KIBS firms exhibit both similarities and differences in spatial behaviour. Firms from both groups are attracted by economies of localisation and commercial zones, while avoiding the densely populated areas in Belgrade. On the other hand, domestic KIBS firms are attracted by city’s main transportation arteries and the traditional CBD area, while foreign KIBS firms tend to agglomerate in the emerging new business district in New Belgrade, an area with plenty of new high-quality office buildings, high-status residential areas, good intra-urban accessibility and airport proximity. This study indicates that foreign KIBS firms produce a spatially bounded “global city zone” and raises a question about their local embeddedness and role in the development of the local economy.