Does Asia’s Financial Intermediation of China’s Solar Industry during the 2020s Exhibit a “California Effect”?

Bryane Michael () and Andy Chi-Lok Tai
Additional contact information
Bryane Michael: Faculty of Law, University of Hong Kong, Pokfulam, Hong Kong, China
Andy Chi-Lok Tai: The School of Professional Education and Executive Development (SPEED), Hong Kong Polytechnic University, Kowloon, Hong Kong, China

Sustainability, 2023, vol. 15, issue 20, 1-21

Abstract: What explains the rise of certain cities as international financial centers—and not others? Increasingly, authors have pointed to a supposed “California effect”—where financiers must geographically locate neither too close nor too far from the companies they serve. However, the successes and failures of Hong Kong’s financial firms to provide finance to China’s solar (photovoltaic) “sunrise industry” paint a far more nuanced picture than the simplistic California effect portrays. We find using new research—financial services firms intermediate or disintermediate the value chains of the client companies they provide finance for. Financial centers can exist thousands of miles—or literally half a world way—from their clients if they develop competencies that let them opportunistically seize market opportunities in sunrise industries, such as the Chinese solar industry. As financial firms actively seek to penetrate new markets, their collective action can make their urban centers hotbeds of novel finance. Such a competencies-based approach to understanding the geography of which we develop helps us understand why certain places emerge as (international) financial centers, and others do not.

Keywords: solar energy; cleantech; international financial center; securitization (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/20/14791/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/20/14791/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:20:p:14791-:d:1258304

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().