Financial centres and information hierarchies: Insights from the geographies of sell-side equity research

Abstract

The accessibility and availability of information play an important role in defining the spatial distribution of financial activities and the relative competitiveness and specialisation of different financial centres. But investigations into the geographies of financial information are frequently constrained by the lack of consistent data at a global scale, especially on the distribution and reach of information-intensive financial professionals. This paper addresses this methodological gap by offering insights into the geographies of sell-side equity research, a subset of highly specialised information intermediaries within the financial ecosystem. It identifies and maps the global distribution of 11,307 analysts, the geographic scope of their activities, and the industry structure of their information collection. In aggregate, this gives insights into the size, reach and role of different centres in information hierarchies and networks. Our findings confirm that information resources remain highly concentrated and that most research coverage is in-country rather than cross-border, highlighting the continued frictions to information flows created by national borders. Domestic activities – analysts at domestic brokers covering domestic corporates – is the single largest category of information collection across most financial centres, regardless of size. Import activities are the second most frequent type of information collection highlighting the need of firms to access remote information networks. London is relatively unique at the global level given its platform role as Europe’s information nexus, a role shared by Singapore in Southeast Asia and by Dubai in the Middle East.