World City Network Expansion 2000-2004. An appraisal of the determinants of connectivity growth among world cities

Renato Aristides Orozco Pereira ()

No 805, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: The term “globalization” has long been vented indiscriminately everywhere with few being capable to either define or measure it. Cities are said to be at the forefront of the “works of globalization” by becoming coordinating centers for the transnational activities of multinational corporations. Ultimately, they become tied up to each other, as those activities require information inputs from different regions of the world. The article uses the advanced corporate service firms’ location patterns to measure the linkages between cities. As social, economical, cultural and political information about the cities flow through the firms’ network of branch offices, a highly connected city provides better corporate servicing to businessman wanting to do business elsewhere. By calculating the total connectivity of each city to the rest of the world, as well as total presence of global service firms within these cities, in the years 2000 and 2004, we produce a measure of the connectivity growth in the period. In a second moment, we use a linear regression model to test hypothesis concerning the determinants of connectivity growth in those cities. Results show us that connectivity growth in a city, in case of firm’s network expansion, display a “rich-get-rich” behavior on which well connected cities became even more connected. Furthermore, connectivity growth is responsive to competition, agglomeration economies, infrastructure, trade openness, human capital and the overall economic level of the country. Some of the variables behave differently according to the service firms’ sector being analyzed. In particular, we scrutinize the role of human capital as a determinant of connectivity growth in the management and banking sector, and interpret the results as a function of whether the sector is skilled-labor intensive (management) or capital intensive (banking).

Keywords: Globalization; World City Network; Interlock Network Model; Global City Model; Economic Geography; GaWC (search for similar items in EconPapers)
Pages: 25 pages
Date: 2008-04, Revised 2008-03
New Economics Papers: this item is included in nep-geo, nep-net and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:0805

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