Abstract
This paper examines the distribution of power within financial networks of investment banks in equity capital markets (ECMs) of three key economies in Asia — Hong Kong, Japan, and Singapore. Using social network analysis, it shows that while bulge-bracket banks occupy core positions in all three locations, their dominance is challenged by emerging Asian investment banks. The ECM networks of investment banks are strongly shaped by development trajectory and regional contexts of specific IFCs, which reveals the differentiated nature of finance across Asia. Results also highlight the need for further research on networks within financial centres in addition to inter-city networks to understand the roles and development of IFCs.
Highlights
The agglomeration of financial activities in international financial centers (IFCs) and global city networks have been a key feature of geographical research on global economic flows and key nodes in global finance (Sassen, 2001; Taylor & Derudder, 2016)
Our understanding of the industry and the geographical contexts of key Asian financial centres are informed by these interviews, the evidence presented in this paper focuses on quantitative structural analysis in order to investigate the power of investment banks, as indicated by the embeddedness of investment banks within such networks
We have examined whether their financial networks within IFCs follow similar patterns in terms of how power is distributed among different types of investment banks
Summary
The agglomeration of financial activities in international financial centers (IFCs) and global city networks have been a key feature of geographical research on global economic flows and key nodes in global finance (Sassen, 2001; Taylor & Derudder, 2016). According to existing research in financial geography, economic sociology, and varieties of capitalism literatures (Brenner et al, 2010; Dixon, 2011; Streeck & Thelen, 2005), we should find distinct patterns of power distribution—patterns that reflect developmental trajectories and regional geographies, and patterns that highlight the territorial dimensions of seemingly global financial networks (Coe et al 2014). We examine this hypothesis by focusing on financial networks of investment banks in equity capital markets (ECMs) of three prominent IFCs in Asia—Hong Kong, Japan, and Singapore.. We analyse the networks of investment banks as they play important roles in shaping financial flows and connecting key actors in global capital markets (Wojcik et al, 2018)
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