Mapping urban networks through inter-firm service relationships: the case of China

Abstract

Literature on how cities get connected through networks of firms has been increasing in recent years. In particular, advanced producer service (APS) firms are being widely used to build intra-firm linkages to establish urban networks. In contrast to studies applying intra-firm networks, this study proposes an alternative strategy to build urban networks based on inter-firm service provision relationships during the process of initial public offering (IPO) in which APS firms – including securities, law firms and accounting firms – provide professional services for firms aiming to be publicly listed. Based on service provision connections between APS firms and their clients, this study provides fresh insights on urban networks in China. The results show that Beijing, Shenzhen and Shanghai strategically hold dominant positions within Chinese urban networks and they are the lead command and financial centres within the country. Particularly, Beijing has overwhelmingly more influence over other cities. The urban networks are embedded in China’s unique institutional context where market and state power together have shaped these networks. Since the urban network is built up based on real economic linkages, the findings might have further implications for policy-making and could contribute to ongoing debates regarding financial centres in China. It implies that connections between firms based on real economic activities can be an effective way to construct urban networks in future research.