Authors: Dariusz Wojcik*, School of Geography and the Environment, Oxford University, Michael Urban, Oxford University, Stefanos Ioannou, Oxford University, Vladimir Pazitka, Oxford University
Topics: Economic Geography
Keywords: Goldman Sachs, adaptive resilience, regulatory capture, global financial crisis, financial centers
Session Type: Virtual Paper
Start / End Time: 11:10 AM / 12:25 PM
Room: Virtual 36
Presentation File: No File Uploaded
For all its iconic character and controversial influence, Goldman Sachs has received rather shallow scrutiny in social sciences. This paper combines an in-depth case study of Goldman Sachs with a theoretical contribution at the nexus of financial geography and evolutionary economic geography. We contend that spatial arbitrage and regulatory capture are fundamental to the organizational resilience of financial firms. Consequently, we argue that financial centers’ adaptive resilience is a product of their strategic positioning in financial firms’ value chains. We formalize this contribution with a framework describing a set of paper, cyber, relational and technical dimensions of financial centers’ resilience and emphasizing regulatory capture in firms’ response and adaptation to shocks. We deploy our framework in a case-study of Goldman Sachs’ evolution between 1999 and 2017, focusing on how it contributed and adapted to the financial crisis of 2008-09. Using original quantitative data and interviews, we shed light on how, as a product of the crisis, the firm unbundled its New York metro operations towards Salt Lake City and how the latter evolved from a brass-plate center to the bank’s second largest US office.