Amenities and spatial talent distribution: evidence from the Chinese IT industry

Provincial-level data from the Chinese IT industry from 2003 to 2011 is used to investigate how amenities affect the distribution of workers’ locations. We find spatial autocorrelation effects in the distribution, and employ spatial econometric models to determine the influence of amenities. By distinguishing high-skilled and high-income IT service workers from the IT manufacturing workers, we show that total amenities play an important role in regional attractiveness for IT service employment, whereas their role is less important in IT manufacturing employment. We attribute this finding to two different location mechanisms: the firms-following-workers mechanism dominates the service sector, whereas the workers-following-firms mechanism dominates the manufacturing sector. The implications of these findings are discussed.