Retail Externalities and Distance in Shopping Malls

Niels Kuiper, Mark Van Duijn and Arno Van der Vlist

ERES from European Real Estate Society (ERES)

Abstract: Shopping malls have revolutionized the retail landscape by their ability to efficiently internalize retail externalities. Based on anecdotal evidence and studies on consumer behavior, we expect that the location of a tenant within a mall can be an important determinant for the extent to which this tenant benefits from the presence of retail externalities in the mall. In this paper we examine this empirically. We make use of a unique dataset that contains 1,170 shopping mall tenants and their monthly sales numbers. These tenants were present in 9 Turkish shopping malls over a 4-year period. We specifically focus on the retail externalities generated by the presence of anchor tenants and the presence of competitors. Preliminary results suggest that anchor presence is an important determinant of non-anchor sales. The size of this externality seems to be dependent on the type of products the non-anchor tenant sells. We also find that the positive externality generated by anchors quickly decreases when distance to the anchor store increases. This seems to confirm our hypotheses that retail externalities have a spatial pattern within malls. Our results for the externalities generated by competitors show large heterogeneity dependent on the product category of the tenant for both the sign and size of the externality and its spatial pattern.

Keywords: Retail Externalities; Sales; Shopping malls; Spatial Variation (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2021-01-01
New Economics Papers: this item is included in nep-isf and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2021_205

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