Transit oriented development (TOD) advocates enhancing public transport connectivity, clustering urban development around public transport nodes and creating station areas with high‐density, diverse land uses and pedestrian‐ and cycling‐friendly environments. While this urban development approach is expected to have positive effects on the urban economy, the impacts of TOD strategies on economic efficiency are yet to be empirically examined. This study operationalised economic efficiency as labour productivity; developed a methodology to investigate how labour productivity is distributed at the local level, to explore the relationships between TOD characteristics and the clustering of labour productivities across different types of industries within a city; and applied it to the case of Beijing, China. The results show that in most cases the distribution of labour productivity has no significant association with TOD characteristics. However, in certain consumer‐service‐related economic sectors (i.e. wholesale and retail; accommodation and catering; and culture, sports, and entertainment) labour productivity is on average significantly higher in an area with stronger transit‐oriented development characteristics. Furthermore, within the conceptual framework of agglomeration economies, the paper identified specific TOD characteristics that are related to the clustering of the higher level of labour productivities in certain industry sectors. These outcomes provide insights for developing more focused TOD strategies, aimed at enhancing the clustering of labour productivities in the identified industries around the existing metro station areas in Beijing.
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