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Venturing from Vancouver? : the changing significance of location for traders, underwriters, and brokers of junior financial equities Sledge, Rachael N.

Abstract

The thesis responds to Richard O'Brien's pronouncement that geography is rapidly losing purchase as an explanation of the structure of global financial markets. I suggest that O'Brien is in error. Drawing on the work of Gordon Clark and Kevin O'Connor, I argue that financial products have logical, geographical outcomes, predicated on different informational requirements. 1 consider one particular financial product, venture capital. Interviews with financial professionals in Vancouver demonstrate that venture capital has a distinctly local geography of production. Market participants cluster in Vancouver to maximise access to, and interpretation of, information regarding venture companies. Contrary to the obliteration of geography, I argue for its continued importance, represented by the existence of smaller financial hubs, such as Vancouver, and which act as information niches for specific financial products. Further, the thesis suggests that the services involved in the production of venture capital also have distinct geographies. Services have logical locations, dictated by their informational requirements. I consider three services involved in the production of venture equities: trading, corporate finance, and sales. Contrasting the periods 1970-1990, and 1990 to the present, I argue that, because of their informational compositions, the three services had divergent experiences of technological and regulatory change. In the period 1970-1990, all three functions were informationally bound to the city. Traders and salespeople required up-to-the-minute market data, and this demanded a presence near the Vancouver Stock Exchange. Financiers prioritised information about promoters and directors of venture companies, and assembled this through face-to-face interaction in Vancouver. Since 1990, however, the geographies of trading, corporate finance, and sales have been re-made. As up-to-the minute market information was automated and rendered almost ubiquitous, trading and sales functions benefited from increased locational flexibility. Traders centralised, while salespeople decentralised, locating closer to their clients. The location of financiers, by contrast, changed very little. Still dependent upon interaction with directors of venture companies, financiers find a Vancouver location most convenient.

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