Publications

13 Jan 13

Luxembourg's specialisation as a financial centre within the global value networks of investment funds.

Authors: DÖRRY Sabine.

Abstract: Ruptures like the recent global financial crisis are inherent elements of our global ‘securitised’ financial system. Re-regulations and the maturing of the financial industry have led to re-organisation processes within the industry with far-reaching implications on international financial centres (IFCs). Surprisingly, little is known about the IFCs’ localised organisational nature, social, and structural power relations. Despite the controversy about ‘tax heavens’, empirical evidence suggests that IFCs without an economic hinterland have developed strong local competencies and competitive advantages besides regulation aspects. Although dependent on foreign national economies, their specialisation capacitates them to offer finance-related services to a favourable cost-benefit ratio. The IFC Luxembourg seems to exemplify such a case. It has specialised in administrating a particular type of securities: (cross-border) investment funds. The paper does not only employ the GPN approach on finance but also innovatively links it with social network approaches, suggesting a new perspective to analysing locally anchored practices and dynamics in order to better understand ‘the global’ of today’s financial system.

Reference: DÖRRY Sabine. Luxembourg's specialisation as a financial centre within the global value networks of investment funds. CEPS/INSTEAD, 2012, Working Papers n°2012-40, 36 p.

Keywords:
international financial centre,
global value chains,
global production networks,
social networks,
social capital,
investment funds,
Luxembourg

JEL: G15, O16, P16, R11, R51.