| This research explores the role of localized external economies and spatial transaction costs in shaping the location, competitive advantage and specialization of book publishers in Germany. There, six cities vie for the dominant position within this urban hierarchy. While Munich is ranked first, Berlin and Frankfurt-am-Main follow closely behind. However, this is an urban hierarchy in which no one city clearly dominates this cultural-product industry. Trade and location theory suggest that this pattern shows that each city specializes in producing specific kinds of titles. In order to assess this prediction, this work investigates the geographical bases of competitive advantage and specialization in the German book trade.; This work draws on structured interviews at 85 book publishing houses in Frankfurt-am-Main and Berlin. Informal interviews, archival resources and secondary statistical data also augment this analysis. Interpreting these data reveals the benefits accruing to book publishers in each of these cities, as well as the locational shifts of book publishing houses throughout Germany.; These benefits obtain in the local labor market, input-output system and knowledge spillovers. However, numerous regional differences exist. Frankfurt-am-Main specialized in producing General Interest titles while Berlin specialized in Social Science titles. The local labor market, input-output system and knowledge spillovers of Frankfurt book publishers were consistently more spatially extensive than was more insular Berlin, though these differences were not always statistically significant. Paradoxically this inward-orientation did not translate into Berlin as a more competitive milieu. Instead, Frankfurt's industry, though smaller, was better positioned to operate in larger and more profitable markets. Additionally, two deeper locational shifts were revealed. First, larger urban areas were losing a disproportionate share of book publishing houses when compared to smaller urban areas. This suggests that spatial transaction costs are falling, enabling in some cases these activities to locate or survive in smaller cities and non-urban areas. However, this might have also been driven by corporate merger activity and differential rates of bankruptcies between urban and non-urban areas. Second, historically there was a westward shift in the location of publishing activities in Germany following the Second World War, and it is unclear if German reunification will reverse this spatial pattern. |
