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The Location of Financial Activities: the Impact of New Technologies and the Financial Crisis

Author

Listed:
  • Gunther Capelle-Blancard

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Yamina Tadjeddine

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

The location of financial activities is traditionally characterized by a great deal of inertia. However, the boom in new information and communication technologies, the globalization of economies and the 2007-08 financial crisis have considerably modified the geography of finance. Financial globalization has, first of all, had a heavy impact on the level of spatial concentration / dispersion of activities. The dynamics have not acted in a uniform way – schematically speaking three levels can be distinguished. On the urban scale, financial activities have been spread out (suburbanization), while on the regional scale or the national scale, due to financial globalization, financial activities have been more tightly grouped. Lastly, on the international scale, a movement of dispersion has mainly been observed, along with a specialization of financial centers. The 2007-08 financial crisis might well accentuate this last effect and cause an upheaval in world hierarchy. Actually, the financial centers that are most elastic to the economic situation – London, New York and tax havens – are massively losing jobs, while the stock markets in Shanghai, Hong Kong and Bombay are now upstaging them as major players.

Suggested Citation

  • Gunther Capelle-Blancard & Yamina Tadjeddine, 2009. "The Location of Financial Activities: the Impact of New Technologies and the Financial Crisis," Working Papers hal-04140868, HAL.
    • Handle: RePEc:hal:wpaper:hal-04140868
    Note: View the original document on HAL open archive server: https://hal.science/hal-04140868
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    References listed on IDEAS

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    1. 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.
    2. Gunther Capelle-Blancard & Matthieu Crozet & Fabien Tripier, 2007. "La localisation des activités financières dans l'Union européenne," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00758384, HAL.
    3. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    4. 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.
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    Cited by:

    1. Farooq, Omar & Zarouali, Ilham, 2016. "Financial centers and ownership concentration: When is ownership concentration value relevant? Evidence from an emerging market," Research in International Business and Finance, Elsevier, vol. 38(C), pages 236-245.
    2. Callaghan, Helen & Lagneau-Ymonet, Paul, 2010. "The phantom of Palais Brongniart economic patriotism and the Paris stock exchange," MPIfG Discussion Paper 10/14, Max Planck Institute for the Study of Societies.
    3. Helen Callaghan & Paul Lagneau-Ymonet, 2012. "The phantom of Palais Brongniart : economic patriotism and the Paris Stock Exchange," Post-Print hal-01519920, HAL.

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    More about this item

    Keywords

    Financial Geography; International Financial Centers; Globalization; Informational Externalities;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G2 - Financial Economics - - Financial Institutions and Services
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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