Open Economies Review

, Volume 19, Issue 4, pp 539–556 | Cite as

Assessing the Competitiveness of International Financial Services in Particular Locations: A Survey of Methods and Perspectives

Review Article


The International Financial Services (IFS) industry is restructuring internally and by location. This paper outlines the economic forces and analytical methods that may be applied to examine the economic drivers of these processes as ever more cities, particularly in East Asia, are vying to attract IFS providers and their clients. The ICT revolution has made those IFS that can be commoditized footloose in search of cost efficiency. High value-added financial services, however, will continue to be developed and coordinated in a few major IFS centers that have invested in, or capitalized on, regional or global advantages for themselves and their clients. The resulting pattern of functional fragmentation and geographic dispersal may facilitate analyses of the competitiveness of different lines of the financial services business in a particular location by methods such as Data Envelopment and Stochastic Frontier Analysis. These forms of comparative efficiency analysis have recently been questioned and their results reinterpreted.


Offshore centers International financial services Financial-business location Efficiency of financial services Data envelopment analysis Stochastic frontier analysis 

JEL Classification

E44 F30 G20 


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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.EconomicsNational Science FoundationArlingtonUSA
  2. 2.J.H. Rudy Professor of EconomicsIndiana UniversityBloomingtonUSA

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