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AND KEYWORDS AbstractThe contemporary rise of China in the new geo-economy is increasingly pressurising the spatial distribution of financial activity in mainland China and Hong Kong. With the re-emergence of Shanghai, many people foresee the furture demise of Hong Kong as the most important financial centre for the China mainland. This paper shows that conviction seems rather premature. Bases on the concepts of comparative advantage and market segmentation, the extent to which Shanghai and Hong Kong can be considered complementary financial centres is assessed. By using the listings of mainland China based companies on the stock exchange of each financial centre, it is shown that both cities do not only appear to have distinct hinterlands but they also differ strongly in terms of sectoral specialisation.

This study examines the changing competitiveness of financial centres in mainland China and Hong Kong based on the geography of equity listing of mainland Chinese firms. Pre-listing firm characteristics are used to explore firms' motives for listing on a particular exchange and whether these motives have changed over time. The results show that Hong Kong's prominence as an international financial centre is attracting the largest and, recently, also the best performing mainland Chinese state-owned enterprises to go public. Less differentiation exists between the competitiveness of Shanghai and Shenzhen, although the renewed strategy of the Shenzhen stock exchange to attract smaller firms appears to be successful.

In this article, we test to what extent the Modifiable Areal Unit Problem (MAUP) moderates the effect of agglomeration externalities on areal sectoral employment growth by varying the initial geographical scale of analysis. Using spatial cross-regressive modelling, we find different effects of agglomeration forces across geographical scales. As the MAUP is a theoretical as well as a methodological problem, research should not only work with proper statistical specifications, but also relate this more explicitly to hypotheses concerning the geographical scale at which agglomeration externalities operate. .