The changing landscape of international finance centres in the 21st century: evidence from cross-border mergers and acquisitions

Authors: Liam Keenan*, , Dariusz Wójcik, University of Oxford , Vladimir Pazitka, University of Oxford , Michael Urban , University of Oxford , Wei Wu, University of Oxford
Topics: Economic Geography
Keywords: International finance centres, mergers and acquisitions, financial geography
Session Type: Virtual Paper
Day: 4/10/2021
Start / End Time: 11:10 AM / 12:25 PM
Room: Virtual 36
Presentation File: No File Uploaded

International finance centres (IFCs) continue to play a dominant role in governing the global economy. While this role has not wavered following the global financial crisis, there is growing speculation that the financial centre of gravity is moving East, with the relative size, resilience and influence of Western IFCs beginning to decline. To investigate this claim, we conduct an analysis of cross-border financial sector mergers and acquisitions (M&As) between 2000-17 to explore the changing geography of IFCs in the 21st century. Drawing from the analysis of 5,357 cross-border deals each valued at over US$10m, we present a global typology of IFCs based on identifying net-targets and net-acquirers. This is supported by the development of IFC M&A profile statements which indicate the number and value of cross-border acquisitions and targets for each city, as well as their % share of these deals as part of the wider global total. This approach helps us critically assess anticipated shifts in global finance and develop a clearer understanding of where finance is, where it is moving, and why. It provides an insightful contribution to financial geography through explaining the relational geographies of IFCs and their mutual entanglements. Overall, findings show a geographically uneven decline in both the number and value of cross-border financial M&A deals following the financial crisis. By analysing this decline we reveal the contours of the emerging new spatial division of labour in the global financial sector and showcase M&As as a valuable analytical tool in exploring the geographies of finance.

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