Does new shopping centre development benefit or harm the local suburban market? Heterogeneous effects from shopping centre type and distance

• Published in: The Annals of regional science 2024-10, Vol.73 (3), p.1339-1363
• Main Authors: Mihaescu, Oana, Korpi, Martin, Öner, Özge
• Format: Article
• Language: English
• Subjects: Companies; D22; Economics; Economics and Finance; Employment; Environmental Economics; Geography; L25; Landscape/Regional and Urban Planning; Microeconomics; Neighborhoods; Original Paper; P25; Panel data; Proximity; R11; R12; Regional/Spatial Science; Regions; Retail stores; Shopping; Shopping centers; Suburban areas; Suburban development; Suburbs
• ISSN: 0570-1864; 1432-0592; 1432-0592
• DOI: 10.1007/s00168-024-01296-9

We study the effects of new shopping centre developments on the performance of 7041 retail and hospitality firms located in the suburbs of Stockholm, Gothenburg, and Malmö. In particular, we analyse to what extent these effects vary with respect to the distance to, and characteristics of, these newly established centres. Exploiting data covering a 17-year period (2000–2016) in a fixed-effects panel regression framework, we find that the establishment of new neighbourhood centres is associated with an average increase in revenues and employment for retail incumbents by + 1.80% and + 1.20%, respectively, for each 100-m reduction in distance to the respective centre. Similarly, the introduction of large regional centres is associated with an increase in the revenues and employment of hospitality firms by + 1.40% and + 1.20%, respectively, for every 100-m decrease in proximity to the new shopping centre. Retail firms are affected by regional centres only in terms of their revenues, which increase by + 0.70% for each 100-m decrease in distance. Our results indicate a diminishing impact of both regional and neighbourhood centres with increased distance, suggesting a broader geographical reach for the effects of regional centres.