Journal of Real Estate Literature最新文献

{"title":"Globalization and Skyscrapers: The Role of Architects in Latin America and Southeast Asia","authors":"Nestor Garza, Sofia Dermisi, Leopoldo Gomez-Ramirez","doi":"10.1080/09277544.2023.2250126","DOIUrl":"https://doi.org/10.1080/09277544.2023.2250126","url":null,"abstract":"AbstractThis paper performs a theoretical-empirical analysis of the effect of globalization on buildings’ height in Latin America and Southeast Asia. We develop a principal-agent model where global architecture firms use extra height as advertising in the tallest building per city, adding it to what determined by cities’ fundamentals of economic and geographic size. The model develops two ideas: (1) global architects have prestige advantages that allow them to add extra height, an advertising feature of their technical expertise and specialist competence, and (2) international architects of the Global South have additional reasons to use extra height compared to their Global North peers. The model is tested using a 2000–2018 panel database comprising 55 cities (from 25 countries). We find that in addition to economic and geography fundamentals, globalization and the location of architecture firms are strong determinants of buildings’ height, as predicted in our theoretical model of height as advertising.HIGHLIGHTSWe develop a behavioral high-rise construction model for Global South cities.The model is tested using panel data on 55 cities from 25 countries.Buildings’ height is determined by city fundamentals and globalization.Regression results prove the effect of architects on extra height.Keywords: Global citieshigh-rise constructionLatin AmericaSoutheast Asiaprincipal-agent model Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 Land availability refers to the total extension of the urbanized area for two reasons: (1) In theory, all the urban land is in the market at every point in time, not just fringe or vacant land. Furthermore, (2) highrise buildings are usually redevelopment projects in already consolidated central or pericentral locations.2 The figures correct the endogeneity between the variables: The larger urban economies are, by definition, the geographically larger metropolitan areas.3 Fuerst et al. (Citation2009) perform a similar exercise with USA data but emphasize differences in price, not in height. Nase et al. (Citation2019), emphasize the demand side (hedonic) contributions to building height in Amsterdam.4 A more general discussion of principal-agent models is offered in Sappington (Citation1991).5 Sappington (Citation1991, p. 45) highlights the essence of the principal-agent problem: “If you [the principal] want something done right, do it yourself.” However, in our complex economy, principals cannot do everything by themselves and, thus, need agents.6 For example, we could have revenues linearly positively related to extra height E, like the RD+βE with 0<β (instead of β=0, as in EquationEquation 2(2) ΠD=RD−(w+γ(HA−HD))(2) ). It can be verified that, by doing so, the predicted 0<E* would not change.7 This is a fairly reasonable range of potential γ values. For instance, Barr (Citation2010) estimated the range of the cost parameter for skyscraper construction in New York to be between ","PeriodicalId":35888,"journal":{"name":"Journal of Real Estate Literature","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134887060","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}