World City Networks Shaped by the Global Financing of Chinese Firms: A Study Based on Initial Public Offerings of Chinese Firms on the Hong Kong Stock Exchange, 1999-2017

Advanced producer service (APS) firms play key roles in the initial public offerings (IPOs) of firms in stock markets. Based on interfirm service relationships between APS firms and their clients in the IPOs of Chinese firms in the Hong Kong Stock Exchange (HKEx) in the period 1999-2017, this study explores how world city networks are shaped in the global financing activities of Chinese firms. The results show that very widely distributed cities are involved in the networks and that Hong Kong holds an overwhelmingly dominant position. In addition, London and the Cayman Islands have become key overseas nodes by providing significant services for Chinese firms, but most overseas cities mainly provide legal services. Furthermore, Beijing, Shanghai, and Shenzhen are in pioneering positions in developing connections with both world cities and offshore jurisdictions. Beijing has great advantages over all other Mainland China cities because it has become both the command center and a service provider. Compared to Hong Kong, Mainland China cities still hold very marginal positions as service providers. Global financing activities by firms from emerging economies such as China have the potential to reshape the world city networks and might have important impacts on the evolution of international and domestic financial center networks. The results indicate that this is a feasible way to explore the relationships between commanding centers and APS centers based on service linkages in the IPO process from the perspective of the world city network. This study also sheds light on the future quantitative analysis of global financial networks.