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Hierarchical Tendencies of Capital Markets Among International Financial Centers

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  • Jessie P.H. Poon

Abstract

The dramatic evolution of global finance in the last three decades has seen intensified competition among the world's major cities to become prominent control centers of global financial flows. This paper examines the spatial organization and evolution of capital markets in forty‐three world cities from 1980 to 1998. It finds evidence of the strengthening of hierarchical tendencies among world financial and capital cities as they search for ways to differentiate between themselves through financial concentration and productivity. The results also indicate a trend towards the dominance of London and New York in this financial hierarchy, and that top tier cities tend to be characterized by significantly lower levels of market and share concentrations, share trading value, and risks. Finally, important differences in ownership patterns between the capital markets are detected for the top cities of the hierarchy.

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  • Jessie P.H. Poon, 2003. "Hierarchical Tendencies of Capital Markets Among International Financial Centers," Growth and Change, Wiley Blackwell, vol. 34(2), pages 135-156, June.
    • Handle: RePEc:bla:growch:v:34:y:2003:i:2:p:135-156
    DOI: 10.1111/1468-2257.00211
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    References listed on IDEAS

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    1. J V Beaverstock & P J Taylor & R G Smith, 1999. "The Long Arm of the Law: London's Law Firms in a Globalising World Economy," Environment and Planning A, , vol. 31(10), pages 1857-1876, October.
    2. Gehrig, Thomas, 1998. "Cities and the Geography of Financial Centres," CEPR Discussion Papers 1894, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Du, Huibin & Xia, Qiongqiong & Ma, Xuan & Chai, Lihe, 2014. "A new statistical dynamic analysis of ecological niches for China’s financial centres," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 395(C), pages 476-486.
    2. Michael H Grote & Florian A Täube, 2006. "Offshoring the Financial Services Industry: Implications for the Evolution of Indian IT Clusters," Environment and Planning A, , vol. 38(7), pages 1287-1305, July.
    3. Bas Karreman & Bert van der Knaap, 2012. "The geography of equity listing and financial centre competition in mainland China and Hong Kong," Journal of Economic Geography, Oxford University Press, vol. 12(4), pages 899-922, July.
    4. Bas Karreman & Bert van der Knaap, 2009. "The Financial Centres of Shanghai and Hong Kong: Competition or Complementarity?," Environment and Planning A, , vol. 41(3), pages 563-580, March.
    5. Ioannou, Stefanos & Wójcik, Dariusz & Pažitka, Vladimír, 2021. "Financial centre bias in sub-sovereign credit ratings," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 70(C).
    6. Nicolas Jannone Bellot, MaLuisa Marti Selva, Leandro Garcia Menendez, 2017. "Herding Behaviour among Credit Rating Agencies," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 2(1), pages 56-83, March.
    7. Palmberg, Johanna, 2012. "Spatial Concentration in the Financial Industry," Ratio Working Papers 188, The Ratio Institute.
    8. Oana Mionel & Viorel Mionel & Cristina Mihaescu, 2014. "The Role of Urban Financial Centers within the Economy of Global Cities," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 3(3), pages 155-168, June.
    9. Marta Degl'Innocenti & Roman Matousek & Nickolaos G Tzeremes, 2018. "Financial centres' competitiveness and economic convergence: Evidence from the European Union regions," Environment and Planning A, , vol. 50(1), pages 133-156, February.
    10. J.P.A. Sagaram & J. Wickramanayake, 2005. "Financial centers in the Asia-pacific region: an empirical study on australia, Hong Kong, Japan and Singapore," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 58(232), pages 21-51.
    11. Booth, G. Geoffrey & Gurun, Umit G. & Zhang, Harold, 2014. "Financial networks and trading in bond markets," Journal of Financial Markets, Elsevier, vol. 18(C), pages 126-157.
    12. Martin Korpi, 2008. "Does size of local labour markets affect wage inequality? a rank-size rule of income distribution," Journal of Economic Geography, Oxford University Press, vol. 8(2), pages 211-237, March.

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