formal and informal networks and social interactions. As one major investment bank
suggested, they were in London because of the “sheer intellectual infrastructure” and “the
professional suppliers available”. But, the bottom line was, if a bank wanted to cut it as a
“global bank” they had to be in London. Here are two typical comments from banks:
We’re here for two reasons - one is that we have an ambition to be an international
bank and you can’t be an international bank unless you have something in London.
The other is that the exposure to London markets and London personnel and the ways
of doing things in London is something we want to gain experience of and
communicate through the rest of the ... Group.
There’s no chance of us moving anywhere else. First and foremost, as long as London
remains the financial center for Europe, then I don’t see . [us] . moving away from
it. Even if we changed the direction of the company or whatever we’d still need to
have a presence in London if you’re going to be a serious player in the financial
markets.
Banks and legal firms were significantly more likely to rate proximity to professional
bodies as being an important advantage of their location and management consultancies
were significantly more likely to rate it as being unimportant. At interview, banks referred
to bodies like the Bank of England or Financial Services Authority, and legal firms the Law
Society, and infrastructure of the court system.
There is a marked difference between firms in the importance attached to being near
leading competitors as a general advantage of locating in London. Banks, insurance and
legal firms were much more likely to rate this factor as being important than firms in other
lines of activity and management consultancies significantly less so. The results are shown
in Table 2. In this table the crucial comparison is between the count, which is the number
of firms that gave a response in each category, and the expected count which is the pattern
which would be observed if the number of firms in each line of activity had their responses
spread over the (three in this case) categories of response in the same proportions as for the
total responses added over all firms. Therefore any case where there is a big difference
between the count and expected count indicates that firms in a particular sector regard a
factor as being unusually important or unimportant. The table shows, for example, that we
would expect only 9.8 of the 29 management consultancies to rate proximity to competitors
as not important but in fact we see that 21 of them did, which is a very marked difference.
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