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London in the European financial services industry: locational advantage and product complementarities


  • Gordon L. Clark


If its prospects were doubted in the early 1990s, London is now the pre-eminent international financial centre. It dominates its European rivals and is joined with New York and Tokyo in a non-stop reciprocal global embrace. Whereas some analysts approach this topic concentrating on the nature and quality of market relationships in London, others emphasise the role that government regulation has played in promoting the growth of the City of London with respect to its European rivals. Here, I elaborate the logic whereby financial products and services are produced at a particular point in space even if financial trading is an increasingly ubiquitous virtual activity. I emphasise the competitive dynamics of the financial services industry, the complementary qualities of financial products, and the place of London in corporate global transactions systems. I mean to show that the production of financial products has been brought to ground (so to speak) in London for a variety of (perhaps non-replicable) reasons. In this regard, my argument is clearly at odds with those analysts of information and communication technology who proclaim the end of geography. However, my argument sits uncomfortably with those who insist upon the persistence and co-existence of different national financial systems. Implications are drawn for the role of London in the evolving integrated European market for financial services, and for the future of continental European financial centres. Copyright 2002, Oxford University Press.

Suggested Citation

  • Gordon L. Clark, 2002. "London in the European financial services industry: locational advantage and product complementarities," Journal of Economic Geography, Oxford University Press, vol. 2(4), pages 433-453, October.
  • Handle: RePEc:oup:jecgeo:v:2:y:2002:i:4:p:433-453

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    References listed on IDEAS

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    Cited by:

    1. George Furstenberg, 2008. "Assessing the Competitiveness of International Financial Services in Particular Locations: A Survey of Methods and Perspectives," Open Economies Review, Springer, vol. 19(4), pages 539-556, September.
    2. Gunther Capelle-Blancard & Yamina Tadjeddine, 2007. "Les places financières : désintégration, suburbanisation et spécialisation," Revue d'Économie Financière, Programme National Persée, vol. 90(4), pages 93-115.
    3. Grote, Michael H. & Täube, Florian A., 2007. "When outsourcing is not an option: International relocation of investment bank research -- Or isn't it?," Journal of International Management, Elsevier, vol. 13(1), pages 57-77, March.
    4. 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.
    5. Michael Ehrmann & Marcel Fratzscher & Helge Berger, 2006. "Forecasting ECB Monetary Policy; Accuracy is (Still) a Matter of Geography," IMF Working Papers 06/41, International Monetary Fund.
    6. Norberg, Peter, 2003. "From Periphery to Financial Centre," SSE/EFI Working Paper Series in Business Administration 2003:11, Stockholm School of Economics, revised 13 Dec 2005.
    7. Berger, Helge & Ehrmann, Michael & Fratzscher, Marcel, 2006. "Geography or skills: What explains Fed watchers’ forecast accuracy of US monetary policy?," Working Paper Series 695, European Central Bank.
    8. Claude DUPUY (GREThA UMR CNRS 5113) & Matthieu MONTALBAN (GREThA UMR CNRS 5113) & Sylvain MOURA (GREThA UMR CNRS 5113), 2009. "Finance and Industrial Dynamics (In French)," Cahiers du GREThA 2009-24, Groupe de Recherche en Economie Théorique et Appliquée.
    9. Claude Dupuy & Stéphanie Lavigne & Dalila Nicet-Chenaf, 2010. "Does Geography Still Matter? Evidence on the Portfolio Turnover of Large Equity Investors and Varieties of Capitalism," Economic Geography, Clark University, vol. 86(1), pages 75-98, January.
    10. Peter Wood & Dariusz Wójcik, 2010. "A Dominant Node of Service Innovation: London’s Financial, Professional and Consultancy Services," Chapters,in: The Handbook of Innovation and Services, chapter 25 Edward Elgar Publishing.
    11. Gulamhussen, Mohamed Azzim, 2007. "Choice of scale by banks in financial centers," International Business Review, Elsevier, vol. 16(4), pages 507-525, August.
    12. Michiel Van Meeteren & David Bassens, 2016. "World Cities and the Uneven Geographies of Financialization: Unveiling Stratification and Hierarchy in the World City Archipelago," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 40(1), pages 62-81, January.
    13. Berger, Helge & Ehrmann, Michael & Fratzscher, Marcel, 2009. "Forecasting ECB monetary policy: Accuracy is a matter of geography," European Economic Review, Elsevier, vol. 53(8), pages 1028-1041, November.
    14. Gary A.S. Cook & Naresh R. Pandit, 2012. "Clustering and the Location of Multinational Enterprises: An Exploration of Financial Services in London," Chapters,in: The Regional Economics of Knowledge and Talent, chapter 11 Edward Elgar Publishing.
    15. Azad, A.S.M. Sohel & Yasushi, Suzuki & Fang, Victor & Ahsan, Amirul, 2014. "Impact of policy changes on the efficiency and returns-to-scale of Japanese financial institutions: An evaluation," Research in International Business and Finance, Elsevier, vol. 32(C), pages 159-171.

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