Hong Kong as an International Financial Centre:

Abstract
Traditional measures of concentration of financial market activities do not adequately reflect an economy 's status as an international financial centre (IFC). In this paper, we construct alternative measures that better capture the ability of an IFC to attract capital flows and international demand for its financial services, as well as its attractiveness as a place for international financial institutions to congregate. We also explore the determinants of the competitiveness of IFCs in an analytical and empirical framework.
Our findings suggest that, in addition to the pull factors of the IFC, push or demand factors from the economies importing financial services from the IFC are also important.
The rise of Mainland China represents a potentially important push factor for the demand for financial services exports from Hong Kong, and hence its status as an IFC.
JEL Classification Numbers: F21; G15; G28
Keywords: International financial centre; financial services exports; financial sector FDI
Author 's E-Mail Address: [e-mail]; [e-mail]
1 The authors are grateful to Hans Genberg and Dong He for their valuable suggestions and comments.
The views and analysis expressed in this paper are those of the authors, and do not necessarily represent the views of the Hong Kong Monetary Authority.
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Executive Summary:
· Hong Kong is often perceived as the hub of most major multinational companies and an important centre for the provision of financial services to international investors.
Yet, based on traditional measures such as concentration of financial market activities, it still appears to remain far smaller than major IFCs such as New York and London.
· This suggests that the traditional measures of the importance of an IFC may not be fully adequate. First, these measures reflect, apart from international financial activities, domestically-oriented activities. Secondly, their measurements of the status of IFCs are

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