The geography of equity listing and financial centre competition in mainland China and Hong Kong

Abstract

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.

Spatial Distribution Pattern of the Headquarters of Listed Firms in China

“…These three types of clustering only accounted for 12-16% of all of the cities. Both market orientation and government guidance contribute to the accumulation patterns of headquarters [1,18,29,51,52]. The implementation of the "Unbalanced Development Strategy" largely resulted in this pronounced inhomogeneity of headquarters among cities and districts.…”

The economic geography of offshore incorporation in tax havens and offshore financial centres: the case of Chinese MNEs

“…One might, therefore, expect finance to be highly relevant to the economic geography of emerging markets. The capital markets of the People's Republic of China, for example, are generally considered not to be driven purely by market forces (and are imperfect, in this neoclassical sense) (Karreman and van der Knaap, 2012;Lai, 2011;Vlcek, 2013). And as Martin (1999, 8) points out, 'the institutional geography of the financial system is important because it can influence how money moves between locations and communities'.…”

“…And as Martin (1999, 8) points out, 'the institutional geography of the financial system is important because it can influence how money moves between locations and communities'. This is certainly true in China, where State Owned Enterprises (SOEs), especially 'national champion' business groups, have privileged access to capital through the state banking sector at favourable rates and preferential access to capital markets owing to their embedded nature within the Communist Party system (Sutherland, 2009;Karreman and van der Knaap, 2012;Naughton, 2007). Private firms, by comparison, generally face acute challenges in securing bank loans because of state control over lending within Chinese banks and control over domestic stock markets (Shen, Shen, Zu, and Bai, 2009;Lai 2011).…”

“…Buckley et al (2007) applied this theory to Chinese OFDI and found that special determinants arising from imperfections in China's capital market were a major factor in Chinese FDI. The capital 18 market in China, in the aforementioned neoclassical sense, is imperfect (Huang, 2003;Karreman and van der Knaap, 2012) and this in turn influences OFDI. A limited number of studies have also noted the importance of raising capital on foreign capital markets (Wójcik and Burger, 2010;Xiao, 2004).…”

The Changing Geography of Domestic Financial City Network in China, 1995–2015

“…Other studies on the evolution of China's financial city network (Cheng, Fan, and Chen ; Zeng et al ) have been based on attribute data, such as outstanding of deposits, premium income and number of employees, and have evaluated intercity relations by the Gravity Model but have been incapable of revealing virtual relations between cities. Most of these studies have also only focused on the evolution of the roles of leading cities, such as Beijing, Hong Kong, Shanghai and Shenzhen, in China's financial city network (Karreman and Van der Knaap ; Lai ; Meyer ).…”