Globalisation, financialisation and technology have fuelled competition among international financial centres (IFCs), with investment banks playing an important part in the process. This study introduces novel data on cross-border investment banking revenues in 2000-2014 by city, and investigates their determinants. It shows that IFCs emerge from cities that are already leading domestic financial centres, with large, deep, flexible and open labour markets, and a large and internationalised non-financial sector, in countries with strong rule of law and contract enforcement. Stock market returns, corporate- and finance-specific taxation, English as the official language, and legal family of origin do not seem to matter.
- International financial centres
- Investment banking
- Labour market