FINANCIAL CLUSTERING IN LONDON
Clusters are distinctive topics in today’s economy. This phenomenon has attracted renewed interest from academics and business practitioners (Saxenian, 1994; Porter, 1998: a-c; Swann, 1998; The Economist, 1999; Owen, 1999), as well as the government subtlety (DTI White Paper, 1998). Clustering can be defines as geographic concentration of interconnected companies, suppliers, providers and institution in a region or nation. It was created because of economic growth, which make bank have the need for making loans and collect savings.
Statement of problem
The presence of leading Financial Centre indicates that there are many competitive advantage lies outside the company or industry, instead of stay in the location of business units. As London becomes the Global financial Centre, it makes them as the largest Centre of wealth, population, trade and communication. Interestingly, despite the high costs in London, many financial institution clusters around Canary Wharf and the financial district.
Purpose of the Study
The purpose of this study is to help determine whether a company needs locating the firm wide operation in London. Since London have a high costs of living, firms need to have knowledge about clustering. Some of unit analysis that is going to be used includes reviewed literatures and survey.
Research Question / Hypothesis
There are several propositions that need to be handle. First of all a company needs to know the need for professional business to clusters. Secondly, the company needs to examine the impact of geographical area, which might bring benefit or harm to them. Furthermore, while many researches have been done for doing a financial cluster in London, it is quite rare to find the ...
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Homogeneity of products is depicted as goods and services that are same or comparable in nature. Since goods are homogenous, firms feel committed to vie for any relative point of interest that they can increase over their opposition. The more homogeneous the product in any industry the further we would expect to see competition (Spar and Yoffie 155). Another factor is transaction costs, the more difficult and time consuming a relocation will be the less likely it will occur. The stickiness is the resistance of a cost to change, in spite of changes in the more extensive economy recommendation of an alternate cost is ideal. Generally, it implies that the costs charged for specific goods and service are hesitant to change despite changes in input cost or demand patterns. Since, most firms cannot switch plant locations freely as most, it will bring around considerable expenses from moves crosswise over fringes. The higher these expenses, the stickier investments will prove to be and stickier investments will evidently decrease the momentum for the race to the bottom. These factors contribute greatly to differences in industry structure and incentives. In addition, there also exist invisible costs such as hiring and training new employees, building contracts etc. Prerequisites must be met, for example,
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Need to be flexible with ability to reconfigure resources in order to take full advantage of potential benefits of globalization. There may be advantages to coordinating activities on a worldwide scale but shouldn’t ignore opportunities at a local level – aspects of standardization and flexibility need to be integrated. Increased globalization means increased complexity for a firm and thus the bureaucratic firms associated with Fordism need to be adapted to deal with complexity.
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Objective- To build on and realize the strengths of the downtown as the heart of the London community: an international centre for the arts, culture, tourism, education, and knowledge based industries, and a leading national business, finance, and government centre.
My conclusion is a lesson that can be learned from the history of Birmingham, you can start with something small and with enough effort it will become big, but nothing will last forever. With Birmingham it started with a small market but with enough effort it turned into a big industrial centre, but it’s not the centre we know now, because it was ‘ruined’ by the interventions after WWI and WWII. But who knows? Maybe in 100 years it will be an industrial centre again!
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Scale Economies: the industry contains several very large players and multiple medium to small players
Saudi Arabia’s capital market is considered to be young compared to other financial markets in the region. Saudi financial markets have been developing slowly because most enterprises in the country are either government owned or family-owned, most of which was funded through state budget, and as a result reduced the need for financing. In the recent past, Saudi Arabia has focused on a careful measurement for structural developments and regulatory changes. However, different phases of historical development of the capital market which can be classified into three phases; pre-industrialization phase, post industrialization phase and growth phase that sparked changes and shaped the kingdom 's capital market on
The main factors which will influence a businesses decision to locate in a certain area are, competition, costs of the area, government incentives, availability of labour, proximity to materials and market. The factors that both businesses will definitely need to consider are the costs of the area and availability of labour. Firstly, the business will need to be located in an area which is relatively inexpensive as they do not want to have a large expense of rents and rates going out of the business every month. This will reduce the potential funds...
Greater London Authority, (2008). London’s Central Business District: “Its global importance”. Greater London Authority, London .UK.
Choi, J-Y, Lee J-H, & Sohn S-Y 2009, 'Impact analysis for national R&D funding in science and technology using quantification method II ', Research Policy, vol. 38, no. 10, pp. 1534-1544.
It is a known fact that the banking industry plays a huge role in today’s society, the industry has grown rapidly of many decades and still growing. The banking sector is that sector of the society that is actually responsible for the handling of financial assets for other sector of the economy, they do this by investing the financial assets in order to create more wealth in the society while regulating all the activities involved in the process. (What is the banking Sector 2015)
Global cities are key command areas in the organization of the world economy, acting as a focus for trade flows and world finance and containing the principal marketplaces for the leading industries. These cities hold major corporate headquarters of TNCs, international banks and international division of labour (Macionis & Plummer 2012). Almost all of the world’s finance is controlled by twenty-five of these cities, with New York, London and Tokyo emerging as the three most powerful centres of world finance. But although these cities are the residences of large corporations and international systems of finance, they also have an increasing number of poor people. In Global cities, there is a sharp c...