Finance:Geography of finance

From HandWiki

The geography of finance (or financial geography) is a branch of economic geography that focuses on issues of financial globalization and the geographic patterns of finance. It studies the effects of state sovereignty, culture, and different kinds of barriers that affect the spatial distribution of finance, such as uneven development and financial exclusion, as well as the global and local connectivity of financial flows and networks. It also researches the creation of new financial centres around the world, both offshore and onshore.[1]

Geographical matters

With the continuing process of globalization, some geographic barriers, such as transportation costs of goods and capital, are steadily decreasing.[2] However, many other kinds of geographic distance are still very present and relevant to explaining spatial differences.[3] In the geography of finance, researchers analyse the effects of this distance on the distribution of the financial system across the world. Fields of research include culture and education,[4] technology,[5] the effects of tacit knowledge and relational proximity,[1] and politics.[6] An interesting issue in the latter is the increasing entanglement of banks and nations,[7] which is closely related to the geography of networks.[8] Furthermore, researchers analyse how and how strongly the current spatial distribution of finance affects the allocation of funds, capital, and credit across different regions.[9]

Financial matters

The relevance of economic geography is already quite established in the academic world, and research on the topic is in full progress.[10] However, the geography of finance is now gaining individual focus, especially as the link between the financial economy and the real economy is losing strength.[11] This is emphasized by the existence of economic bubbles and the fact that the value of financial transactions is often multiple times larger than the real economy.[12]

Recent developments

The September 11 attacks that targeted the World Trade Centre in New York City drew new attention to the geography of finance. Even though cities have more often been damaged by natural disasters or terrorist attacks, this attack was focused on the financial system and proved to have significant effects. The event led to a rethinking of the global geographical organization of the financial services industry and drew academic attention to the importance of such densely organized financial districts.[13]

The financial crisis of 2007–2008 also led to interesting developments in the geography of finance. It drew new attention to the field, as the crisis showed that local events could cause a global financial crisis that affected small businesses and local governments around the world.[14] The relocation of financial services that had already been occurring was amplified by this crisis, decreasing the importance of major financial centers like Wall Street in lieu of relatively new financial centers elsewhere around the world.[15]

See also

  • International Finance
  • International Trade
  • Location Theory

References

  1. ↑ 1.0 1.1 Jayson J. Funke. "Geography of Finance". Oxford Bibliographies. http://www.oxfordbibliographies.com/view/document/obo-9780199874002/obo-9780199874002-0024.xml. Retrieved 2013-12-20. 
  2. ↑ Saif I.Shah Mohammed and Jeffrey G. Williamson (2004). "Freight rates and productivity gains in British tramp shipping 1869–1950". Explorations in Economic History 41 (2): 172–203. doi:10.1016/S0014-4983(03)00043-3. 
  3. ↑ J. Michael Greig (2002). "The End of Geography? Globalization, Communications and Culture in the International System". Journal of Economic Geography 9 (5): 597–617. doi:10.1093/jeg/lbp026. 
  4. ↑ Sarah Hall and Lindsey Appleyard (2009-06-11). "'City of London, City of Learning'? Placing business education within the geographies of finance". Journal of Economic Geography 9 (5): 597–617. doi:10.1093/jeg/lbp026. 
  5. ↑ Philip G. Cerny (1994). "The dynamics of financial globalization: Technology, market structure, and policy response". Policy Sciences 27 (4): 319–342. doi:10.1007/BF01000063. 
  6. ↑ Cox, Kevin R. (1997-03-29). Spaces of Globalization: Reasserting the Power of the Local - Google Boeken. Guilford Press. ISBN 9781572301993. https://books.google.com/books?id=rn-XlAfMVmMC&q=financial%20geography%20politics&pg=PA1. Retrieved 2014-01-15. 
  7. ↑ Nicolae Gârleanu, Stavros Panageas and Jianfeng Yu (2013). "Financial Entanglement: A Theory of Incomplete Integration, Leverage, Crashes, and Contagion". http://faculty.haas.berkeley.edu/garleanu/FinEnt.pdf. Retrieved 2014-01-18. 
  8. ↑ Johannes Glückler (2007-05-29). "Economic geography and the evolution of networks". Journal of Economic Geography 7 (5): 619–634. doi:10.1093/jeg/lbm023. 
  9. ↑ "Geography Department, Cambridge » The Economic Geography of Money and Finance". Geog.cam.ac.uk. 2014-01-30. http://www.geog.cam.ac.uk/research/projects/moneyfinance/. Retrieved 2014-01-15. 
  10. ↑ "Nep-Geo". Ideas.repec.org. http://ideas.repec.org/n/nep-geo/. Retrieved 2014-01-18. 
  11. ↑ Menkhoff, Lukas; Tolksdorf, Norbert (2000-12-04). Financial Market Drift: Decoupling of the Financial Sector from the Real ... - Lukas Menkhoff, Norbert Tolksdorf - Google Boeken. Springer. ISBN 9783540411659. https://books.google.com/books?id=PiaKlwb4CT0C&pg=PA14. Retrieved 2014-01-18. 
  12. ↑ Kindleberger, Charles P.; Aliber, Robert Z. (2011-08-09). Manias, Panics and Crashes: A History of Financial Crises, Sixth Edition - Charles P. Kindleberger, Robert Z. Aliber - Google Boeken. Palgrave Macmillan. ISBN 9780230367562. https://books.google.com/books?id=Er-6QkkQkeEC&dq=ratio+financial+bubble&pg=PP2. Retrieved 2014-01-15. 
  13. ↑ Nicole Pohl. "Where is Wall Street? Financial Geography after 09/11". http://igeographer.lib.indstate.edu/pohl.pdf. Retrieved 2014-01-18. 
  14. ↑ Ewald Engelen and James Faulconbridge (2009-07-20). "Introduction: financial geographies—the credit crisis as an opportunity to catch economic geography's next boat?". Journal of Economic Geography 9 (5): 587–595. doi:10.1093/jeg/lbp037. 
  15. ↑ Daniel Altman (2008-09-30). "Other financial centers could rise amid crisis". The New York Times. https://www.nytimes.com/2008/09/30/business/worldbusiness/30iht-glob01.1.16579561.html?_r=1&. Retrieved 2014-01-18. 



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