Agglomeration Economies and the Built Environment: Evidence from Specialized Buildings and Anchor Tenants

Crocker H. Liu, Stuart S. Rosenthal and William C. Strange

Journal of Urban Economics, 2024, vol. 142, issue C

Abstract: Previous work on agglomeration economies ignores the built environment. This paper shows that the built environment matters, especially for commercial sectors that dominate city centers. Buildings are specialized beyond random assignment, in part because externality-generating anchor tenants skew a building's other tenants towards the anchor's industry. An anchor elsewhere on the blockface has a much weaker effect, and one that is weaker still if across the street, suggesting rapidly attenuating agglomeration economies. Attenuation is pronounced for retail and information-oriented office industries but is absent for manufacturing. Building managers have incentives and capacities to partly internalize local externalities, contributing to urban productivity.

Keywords: Agglomeration; Commercial real estate; Anchor tenants; Built environment (search for similar items in EconPapers)
JEL-codes: O18 R30 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:142:y:2024:i:c:s0094119024000251

DOI: 10.1016/j.jue.2024.103655

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