Gateway Cities: The Metropolitan Sources of US Producer Service Exports

Abstract

The US's exports of producer services increased threefold in the 1980s. Those exports plus the repatriation of income from foreign affiliates of US producer service firms now equal US agricultural exports. This paper documents the growth and composition of those producer service exports and then attempts to identify their metropolitan sources. Four metropolitan areas, and particularly their central cities, stand out as having both high concentrations and specialisations in producer service industries and as being the location of the head offices of the largest producer service firms. Ordinary least-squares equations are presented for one of the cities, New York, which links the city's producer services sector to US exports of producer services. For the total private gross city product of New York City, the elasticity with respect to US exports of producer services ranges from +0.19 to +0.25.