Determinants of the Status of an International Financial Centre

23 Pages Posted: 7 Jan 2017 Last revised: 5 Jun 2020

See all articles by Imad Moosa

Imad Moosa

RMIT University; Financial Research Network (FIRN)

Lary Li

RMIT University - School of Economics, Finance and Marketing; Financial Research Network (FIRN)

Riley Jiang

RMIT University

Date Written: December 2016

Abstract

In March 2014, New York overtook London as the number one financial centre in the world as ranked by the global financial centre index (GFCI). This move has raised questions as to what has actually happened to justify such a change in ranking. Some questions are also raised such as why Mauritius is ranked higher than Helsinki. Notwithstanding the problems associated with the GFCI as a measure of the status of an international financial centre, an attempt is made to identify the determinants of the status of 53 financial centres using 24 potential explanatory variables and the technique of extreme bounds analysis (EBA). The results show that the important determinants include, among others, the corporate tax rate, global competitiveness, global credit rating, occupancy cost and property rights. A policy implication of the results is that attention should be paid to these determinants if a financial centre is to consolidate its position.

Suggested Citation

Moosa, Imad and Li, Larry and Jiang, Riley, Determinants of the Status of an International Financial Centre (December 2016). The World Economy, Vol. 39, Issue 12, pp. 2074-2096, 2016, Available at SSRN: https://ssrn.com/abstract=2894678 or http://dx.doi.org/10.1111/twec.12369

Imad Moosa

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Larry Li (Contact Author)

RMIT University - School of Economics, Finance and Marketing ( email )

Business
Level 12, 239 Bourke Street
Melbourne, Victoria 3000
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Riley Jiang

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

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