Cities in Global Financial Networks: Financial and Business Services and Development in the 21st Century

Project Information

CityNet

Grant agreement ID: 681337

DOI

10.3030/681337

Project closed

EC signature date 17 June 2016

Start date 1 August 2016

End date 31 July 2022

Funded under

• EXCELLENT SCIENCE - European Research Council (ERC)

Total cost

€ 1 929 306,00

EU contribution

€ 1 929 306,00

Coordinated by

THE CHANCELLOR, MASTERS AND SCHOLARS OF THE UNIVERSITY OF OXFORD
United Kingdom

Periodic Reporting for period 4 - CityNet (Cities in Global Financial Networks: Financial and Business Services and Developmentin the 21st Century)

Reporting period: 2021-02-01 to 2022-07-31

Summary of the context and overall objectives of the project

Financial and business services (FABS), including law, accounting, and business consulting, have been one of the most dynamic sectors of the world economy, with a fivefold rise in real value added since 1980. Although FABS are central to the processes of globalisation, financialisation, urbanisation and development, our understanding of the sector in the context of tumultuous changes of the early 21st century is partial. How have the FABS firms and centres been affected by the global financial crisis and the Eurozone crisis? How are they changing in response to new financial regulation, the expected shift of economic activity to the Asia-Pacific region, and the digital revolution? What are the impacts of FABS on urban, regional, and global development? We urgently need groundbreaking frontier research to better understand the nature and dynamics of FABS, and their implications.
This project was designed to address this challenge by focusing on three objectives: mapping the FABS sector and its transactional networks worldwide; analysing strategies of FABS firms, as well as policies towards FABS and their institutional environments in cities; explaining the impacts of FABS, their strategies, and place-specific factors on growth, stability, and inequality at urban, regional, national and global level. In doing so, it developed a new theoretical framework, called the Global Financial Networks, which positions FABS and their networks in the broader economy. Using a mixed-methods approach, it documented the development of FABS and its consequences, cutting through the hype of financial centre indices, and through the fog of ideologically charged debates on the virtues and vices of the financial sector. One of the outcomes of the project is the world’s first ever atlas of finance. The project provides a robust evidence base crucial in shaping future rounds of investment by and in FABS, and policies towards FABS by governments and other organisations.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The project combined data from Dealogic, Oxford Economics and other sources, to produce a series of publications on the factors affecting the development of financial centres, and the evolution of the networks of financial and business services firms. We conducted over 200 interviews: in-person in the UK, USA, China, Brazil, and India; and online interviews in Argentina, Mexico, Germany, France, Greece, Spain, Italy, Belgium, the Netherlands, Luxembourg, Ireland, Switzerland, and Sweden. The interview material led to the publication of a series of articles on financial sector strategies, with much focus on FinTech, the part of the financial sector, and a force of change for the sector, which started booming after the start of the project. The third stream used both quantitative and qualitative data to produce publications on the impacts of finance (including new financial technology) on economic growth of regions and cities, on financial instability, income and regional inequality, as well as environmental sustainability.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The project moved beyond the state of the art at three levels: theoretical, methodological, and empirical. On the theoretical level, it developed the novel concept of Global Financial Networks. In a nutshell, GFNs can thus be defined as networks of FABS and their activities linking financial centres, offshore jurisdictions, and acting as key intermediaries between transnational companies and territories. As such the concept contributes to the fields of geography, economics, political economy, political science, economic sociology, urban studies and other related areas. Methodologically we offered a uniquely rich and diverse set of quantitative and qualitative methods including network analysis, spatial econometrics, time-series analysis, comparative case studies based on interviews, document and discourse analysis. A major methodological contribution concerns unique combinations of data never or hardly used before in academic research, including data on financial transactions and cities. Empirically, this was one of the largest projects ever to map finance and its transformations in response to economic (shift to Asia and the Global South), political (new regulation, Brexit), and technological (new financial technology) factors, which focuses on the drivers, mechanisms and impacts at multiple scales, from local, urban and regional, through national, to global. In addition to journal articles, edited volumes and books, and policy-oriented reports, the project produced the first ever atlas of finance.

Structure of the project