Agglomera)on Economies & Global Ci)es: the case of London, New York & rela)vity
Lynne Michael London
ERES Conference Istanbul June -‐ 2015
Presenta@on Outline and Objec@ves
Aim: examine change in agglomera@on associated with development of Global Ci@es.
Iden@fy any change in property investor preference between London and New York pre
and post GFC.
General background to the issue
Trends in exis)ng research
Emerging change in agglomera)on drivers
Method: induc)ve reasoning and secondary data provided by RCA,
examine pre and post GFC commercial transac)ons plus the rela)onship
between GVA and transac)on volumes for London
Conclusion and areas for future inves)ga)on
Researchers differ in their thoughts as to what contributes to city growth.
Marshall’s theory relies on specialisa)on aLrac)ng like
industry & benefits of economies of scale
Jacobs theory relies on diversity s)mula)ng growth and further diversity – import replacement & new business built on old (Jacobs,
1970)
Wealth producing industries -‐ highly knowledge dependant.
Knowledge spillover benefits drive spa)al effect in land use
agglomera)on. Human capital value importance.
Distance & agglomera)on economies are more central
Exis)ng research: Despite a ‘)me-‐space compression’
My study relates Jacob’s theories of agglomera)on to London and New York IFCs determining the
dominant recipient of commercial property
investment funds.
Furthermore, to connect
contemporary agglomera)on
and self-‐augmenta)on
theories.
Using RCA data 2 periods, pre and post GFC, were analysed, i.e. 2000-‐07, 2008-‐14
Why?
Capital flows in, out and within ci)es have been examined but total rela)vity between investment flows to London and New York have not been explored. My research aim is to test: a) London and New York rela)vity in commercial real estate transac)ons from 2000 to 2014 b) ‘self-‐augmenta)on’ via efficient knowledge economies RCA secondary data is analysed to: Describe the comparable vola)lity and strength of capital flows
Figure1: Commercial real estate transac)ons New York and London 2000 – 2013
• Source: Author complied RCA data
• Self Augmenta)on • An ini)al explora)on of the value of human capital in self-‐
augmen)ng agglomera)on • Regression of total Gross Value Added (GVA) with commercial
real estate transac)ons for London.
• Concluding • London/New York analysis indicates lower vola)lity and
beLer es)mate for London. • A posi)ve rela)onship between GVA and commercial real
estate transac)ons • Future research into linking knowledge economy drivers and
agglomera)on include:
• Money supply • Employment and income figures in financial and advanced
producer services industries • Exchange rates • High end residen)al real estate ac)vity
Thank you for listening
Any ques)ons?
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