Growth of advanced service firms and usage of quality office space: The case of hong kong

This paper examines the impact of the expanding service sector in Hong Kong upon the increasing quality of office space demanded. Two measures are used to represent quality: increased usage of IT facilities in offices; and increased space per employee. The main result is that there is a significant correlation between growth of the service sector, as represented by the FIRB sector, and demand for better quality space. However, not all of the firms in the FIRB sector use/demand high quality space. The finance, business services and technology firms in Hong Kong have invested relatively heavily in IT facilities, and have also gained a higher growth relative to those with less investment in IT. Insurance and real estate firms use relatively less IT facilities. Growth of the service sector has also influenced the space usage pattern in Hong Kong. The causality analysis shows that provision of higher quality office space attracts new users.