Open configuration options Do Creative Industries Enhance Employment Growth? Regional Evidence from Colombia

Abstract

Creative industries are considered highly innovative and productive, constituting an important driver of economic change. For high-income countries, several studies discuss the positive spillovers of creative industries for the local economy, for instance by attracting creative workers, which can benet entrepreneurs and workers in other industries. Like many other activities, creative industries are likely to dier in low- and middle-income countries compared to high-income countries. Moreover, the existing evidence is based on correlations between variables likely to be endogenous. This paper contributes to the literature on the role of creative industries in driving economic change in two main ways. First, we make a rst attempt to control for endogeneity and identify the impact of creative industries on local economies. Second, we report evidence for a middle-income country. Using granular employment data, we study the agglomeration patterns of creative industries across Colombian cities between 2008 and 2017. Exploiting the co-location of creative industries with other industries, we estimate the relation between employment growth in creative and non-creative industries in the same city. Using a shift-share instrumental variable approach, we estimate the multiplier eect of employment growth in creative industries on the employment growth in the rest of the economy. Creative industries represented between 2.7 and 3.3 percent of Colombian employment in 2008 and 2017. We nd that creative industries agglomerate mainly in three large cities (Bogota, Medelln, and Cartagena) and in a few smaller cities. Such agglomeration is positively related to an increase in the employment of non-creative services industries. For a positive causal relation to materialize, creative industries should have a larger size or be more connected to other economic sectors. However, after controlling for endogeneity, we nd no signicant impact of an increase of creative industries employment on employment growth in other industries.