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

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Retail stores in a Japanese city lit up at night along a street crowded with pedestrians

City street in Japan. photo / Andre Benz via Unsplash


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, 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 both incentives and capacities to internalize local externalities, contributing to urban productivity.


Stuart S. Rosenthal comes to Cornell from Syracuse University, where he was the Maxwell Advisory Board Professor of Economics and a senior research associate in the university's Center for Policy Research.

Rosenthal's work covers many aspects of the economics of cities, including housing and mortgage markets, local tax policy, spatial patterns of productivity, and land use and costs. His knowledge and expertise in these areas, as well as his many editorial roles with a number of leading academic journals, advance critical discourse in the real estate industry and discipline from multiple perspectives, making him particularly well-suited to lead and shape real estate education at Cornell.

Rosenthal is a Fellow of the Homer Hoyt School of Advanced Studies in Real Estate and Urban Economics and the Regional Science Association International (RSAI). He has served on the council for the Urban Economics Association, the Board of Directors of the American Real Estate and Urban Economics Association (AREUEA), and as an executive officer of AREUEA from 2013–2015. From 2017–2021, Rosenthal served as Chair of the Syracuse Department of Economics. In 2013, he received the RSAI Walter Isard Award for Scholarly Achievement. Rosenthal holds a Ph.D. in economics from the University of Wisconsin-Madison and a B.A. in economics from Bowdoin College.

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