Measuring urban agglomeration economies with office rents

Drennan, Matthew P.; Kelly, Hugh F.

doi:10.1093/jeg/lbp066

Cited by 49 publications

(33 citation statements)

References 29 publications

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“…The positive Outdegree (city) activity effect suggests that newly entered firms prefer to locate in cities with many existing firms, i.e., a preferential attachment process. Preferential attachment processes in the intercity corporate network are often driven by agglomeration (or external) economies of scales, as the clustering of different producer services may benefit from labor-pooling, supporting infrastructures, and innovation/information spillovers (Neal, 2008;Drennan and Kelly, 2011). Similar to a "snowballing" scenario, a positive Indegree (firm) popularity effect indicates that firms with many branches are prone to continue their expansive locational strategies.…”

Section: Evolution Of the Intercity Corporate Networkmentioning

confidence: 99%

Exploring the co-evolution of the geographies of air transport aviation and corporate networks

Liu

Derudder

García

2013

Journal of Transport Geography

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In this paper we aim to contribute to the literature on the empirical parallels between urban hierarchies and the transport networks supporting and/or reflecting these hierarchies. We adopt a stochastic actor-based modeling framework to analyze the co-evolution of the world city hierarchy and global air passenger networks between 2000 and 2010/2011. The data are drawn from an inventory of the location strategies of globalized service firms across world cities and the International Civil Aviation Organization (ICAO). Major findings include (1) exogenous effects, such as the impact of economic development and regionality; (2) endogenous micro-level effects producing macro-level patterns, such as preferential attachment processes; and (3) the two-way impact of both networks. (i.e., cities that are well connected in the aviation network tend to attract more major offices of globalized service firms, while the co-presence of major offices of globalized service firms in cities in turn stimulates the development of aviation connections between them).

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Section: Evolution Of the Intercity Corporate Networkmentioning

confidence: 99%

Exploring the co-evolution of the geographies of air transport aviation and corporate networks

Liu

Derudder

García

2013

Journal of Transport Geography

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“…Although their results do not support a positive effect of public rail transit on office rents, their professional employment concentration variable is similar to the use of producer service employment as a determinant of office rents in the paper by Drennan and Kelly (2011).…”

Section: Literature Reviewmentioning

confidence: 60%

“…In developing the model we hoped to specify a structural equation from which we would derive a viable estimating equation, as in the recent article on agglomeration economies arising from office activities (Drennan and Kelly 2011). We wanted all the variables in our estimating equation to be annual changes (first differences) rather than levels in order to avoid the twin econometric problems of omitted variable bias (the omission of a variable that affects rents but is constant over time, such as building codes and zoning laws) and nonstationery variables (a variable with a time trend which, when included, leads to biased results).…”

Section: Panel Regression Model and Datamentioning

confidence: 99%

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Does public transit use increase the economic efficiency of urban areas?

Drennan

Brecher

2012

JTLU

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This paper explores the relationship between the scale of public transit services in large urban areas of the United States and the efficiency of those economies, with efficiency measured by commercial office rents. Panel regressions are estimated in which real office rent is the left-hand variable. The key right-hand variable is per-capita transit use. Other right-hand variables include demand for office space, office vacancy rate, average real wage, and unemployment rate. Two-stage least-squares equations are estimated to deal with possible simultaneity between office rents and transit use. Results indicate a positive relationship between public transit use and office rents. The relationship is positive and significant in urban areas with higher concentrations of office space in the central business district, and nonexistent in urban areas with lower concentrations. The estimated dollar impact of transit use on office rents is small.

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“…Cities that are able to attract more firms will almost surely face lower unemployment levels and higher productivity growth (Baptista et al, 2008;Van Stel and Suddle, 2008). Current empirical studies that pay specific attention to the impact of diversity and specialisation on location decisions are on an aggregate spatial level and focus mostly on extrametropolitan agglomeration economies in the manufacturing sector, whereas it is suggested that, especially for business services firms, local interactions are more relevant (Muller and Zenker, 2001;Duranton and Overman, 2005;Drennan and Kelly, 2010;Ellison et al, 2010). For example, Arzaghi and Henderson (2008) show that interactions between advertising agencies mainly take place within a couple of hundred meters.…”

Section: Introductionmentioning

confidence: 99%

Geographic Concentration of Business Services Firms: A Poisson Sorting Model

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper estimates a heterogeneous sorting model for firms, employing a semiparametric Poisson approach. We show that there is an equivalence relation between a locally weighted Logit and Poisson model. We apply our model to estimate firm-specific preferences of business services firms for location attributes such as diversity of economic activities and specialisation of business services. We correct for endogeneity of our specialisation measure by means of a control function approach, using instruments external as well as internal to the model. We find that business services firms have a relatively strong preference for specialised clusters of business services firms, conditional on density of economic activity. A standard deviation increase in business services specialisation of a location leads to a 40 percent increase in the probability that a business services firm locates there, supporting theories of Marshall, Arrow and Romer. Business services firms also have a preference to locate near a group of firms that belong to the same sector, not necessarily business services firms, so diversity is negatively related to location decisions. Interestingly, firms rely either on within-sector interactions (specialisation) or between-sector interactions (diversity).

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Measuring urban agglomeration economies with office rents

Cited by 49 publications

References 29 publications

Exploring the co-evolution of the geographies of air transport aviation and corporate networks

Exploring the co-evolution of the geographies of air transport aviation and corporate networks

Does public transit use increase the economic efficiency of urban areas?

Geographic Concentration of Business Services Firms: A Poisson Sorting Model

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