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Financial Systems as Part of the German Model: An International Comparison of Company Financing from a Spatial Perspective / FinVER

Aim and Core Questions of the Research Project

The study will give an overview of the different varieties of financial systems in their spatial surroundings and answer the question in how far financial systems differ concerning their impact:

First, there is to be drawn a “map of the financial economy“ which on the one hand gives an overview of the status quo and the trends regarding the functions, competences and reputations of certain financial and off-shore centres. On the other hand, this map draws a connection between the different national financial regimes and the factor of spatial distance. With respect to this map we also want to observe the impact (and the profit) of civil-society-oriented movements in certain financial centres (e.g. Occupy movement in Frankfurt) on the financial economy, the media and the politics.

Second, there will be case studies of financial intermediations in their spatial surrounding of specific countries with respect to the question of how satisfied the bank employees are. They are put into contrast concerning their societal and economic impact.

Third, on the basis of all this, we want to find out which financial architecture (decentralised vs. centralised) contributes in a higher degree to the economic growth and which one is less sensitive to financial crises.

Fourth, it is to debate which elements of financial systems in regard to their spatiality promise to be best for society - with respect to the specific mentality, culture, values, norms, institutions and structures.

Fifth, we want to have a look on financial intermediaries (decentralised vs. centralised ones) regarding the question to what degree they contribute to a balanced regional development.

Sixth, we want to discuss how a future regulation and financial architecture could look like and which competences relevant for society should be conducted by which financial centres/ places.

Seventh, it is to answer the question of how the cultural and structural organisation of the different institutions of financial intermediaries influence the possible ways how relevant knowledge is included in the final credit decision. In this regard, it is not only to consider how the resource “local knowledge” is supported by the specific organisation systems of the intermediaries but also how the factors of identification and values of employees come into play. In addition, the aspect of elements like participation and local self-government of staff has to be taken into account. 

Approach

Core elements of the research project are the comparison between decentralised and centralised value chains of financial intermediation as well as the synthesis from that, meaning a comparison between different national financial systems. Starting point builds a global analysis of national varieties of financial capitalism (module I), which will give an overview of global trends and general differences regarding the way financial markets work. This module should be the theoretic and empirical basis for module II, which consists of country studies comparing specifically the national financial regimes and their international connections. Three different European countries were chosen: Germany and the UK with as contrasting systems as possible and Spain in between. Germany shall function as the referential space and will always be compared to the rest within the whole analysis. All the (case) studies will be put together in a synthesis (module III) and finally give an overview of all the varieties of financial capitalism. Furthermore, this might help to further develop the Varieties of Capitalism approach on a sound base and might also contribute to come up with a concept of a financial economy which rather focuses on a long lasting development.