GaWC Research Bulletin 431

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This Research Bulletin has been published in Tijdschrift voor Economische en Sociale Geografie, 105 (4), (2014), 398-411.


Please refer to the published version when quoting the paper


Network or Hierarchical Relations? A Plea for Redirecting Attention to the Control Functions of Global Cities

C. Parnreiter*


The purpose of this paper is to explore whether and to which extent the ‘interlocking world city network model’ (henceforth IWCNM; for a short introduction to its premises and remits see Derudder and Parnreiter in this volume) has contributed to overcoming the ‘evidential crisis’ (Taylor 2004, 39) within world or global city research1. As pointed out in the introduction to this special issue, criticisms of the empirical basis of global city research are as old as the concept itself. The question here is whether, roughly a decade after the IWCNM was introduced (Taylor 2001), and after a great number of studies have produced data on intercity relations at global, regional and national scales by applying the model, this empirical deficiency continues to be the global city paradigm’s sore point. Answers to this question differ, not only between opponents and advocates of the global city concept, but also among the latter. For example, while Derudder et al. (2010) claim that the dearth of data in world city research has by and large been averted by employing the IWCNM, Beaverstock (2011) and Parnreiter (2010) insist that an evidential crisis continues to undermine the strength of the global city argument.

Against this backdrop I will reflect on the model’s suitability for meeting the empirical needs of the global city paradigm. For that purpose, I will firstly summarize what in my reading constitutes the theoretical core of Friedmann’s and Sassen’s reasoning about world and global cities, respectively. My contention, in a nutshell, is that the global city concept is an economic geography approach towards grasping the new organizational structure of the world economy that has emerged with globalization processes. Secondly, I will deduce methodological implications that follow from such an economic-geographical conceptualization of global cities. Thirdly, I will recapitulate the rationale(s) given by Peter Taylor for the IWCNM, to then, fourthly, proceed to assess the IWCNM’s contribution to empirically corroborating the global city concept. Since I conclude that the IWCNM bypasses the theoretical core of the global city paradigm, in the final section of the paper I will propose research methods and a strategy that in my reading is likely to take global city studies a step forward.

The global city paradigm according to Friedmann and Sassen

The global city paradigm in its current understanding emerged in the 1980s with the writings of Friedmann and Sassen (Friedmann & Wolff 1982; Friedmann 1986; Sassen 1988, 1991), although Hymer (1972) and Cohen (1981) already suggested earlier that specific cities were assuming a new strategic role for the cross-border activities of what were then called multinational corporations. Since then the literature has addressed numerous aspects of global city formation. One of the most extensive strands is the urban studies approach to global cities, in which the reorganization of urban economies, the emergence of a new socio-spatial order, or shifting scales and power relations in urban governance are analyzed as conditions as well as consequences of global city formation (for an overview see Parnreiter 2013a). Despite this focus on urban issues, in my understanding the global city concept is, in essence, an economic geography perspective on how globalization processes are organized and governed: ‘A key purpose of the model is to conceive of economic globalization not just as capital flows, but as the work of coordinating, managing, and servicing these flows. […] The global city network is the operational scaffolding of […] the global economy’ (Sassen 2001, 347f). This focus on shifts in the spatial structure of the world economy comes with no surprise, given that many of the key proponents of global city research have (some of) their intellectual roots in the Wallersteinian project of analyzing capitalism as a world-system which is characterized by ever changing core-periphery relations (Wallerstein 1974; Hopkins & Wallerstein 1977). Accordingly, the principal interest of the seminal contributions to the global city literature was to explore and theorize the new geography of the world economy, which became apparent with the ‘new international division of labor’ (Fröbel et al. 1977) in the 1970s. Friedmann and Wolff (1982, 309) defined ‘the spatial articulation of the emerging world system of production and markets through a global network of cities’ as their prime interest and contended that management and power in the world economy were increasingly centralized in a certain number of cities. These ‘world cities’ were seen as ‘the “basing points” in the spatial organization and articulation of production and markets’ (Friedmann 1986, 71) with the task to ‘articulate larger regional, national, and international economies’ (Friedmann 1995, 22). In addition to this articulation function, Friedmann (1986, 73) pointed to the ‘control functions of world cities’, which he assumed to be reflected in the clustering of corporate headquarters, international finance, transport and communication infrastructure for global business, high level business services, and the production and dissemination of information and cultural artifacts. Friedmann and Wolff (1982, 310) also emphasized that world cities were ‘(t)ightly interconnected with each other through decision-making and finance’, thereby constituting ‘a worldwide system of control over production and market expansion’.

Though Sassen opted for a different terminology – global city instead of world city – to stress that she was rejecting earlier notions of world cities as capitals of empires or as the top of the power hierarchy, she nevertheless shared Friedmann’s central concern with the articulation and governance functions of global cities: ‘my use of the notion of global city functions (is) to identify a particular case, that of a city which fulfilled a fairly limited and highly specialized set of functions in the management and servicing of the global economy’ (Sassen 2001, 351). Sassen’s basic contention was that global cities are places ‘from where the world economy is managed and serviced’ (Sassen 1988, 126f) as well as ‘highly concentrated command points in the organization of the world economy’ (Sassen 1991, 3).

Yet, Sassen’s interest does not lie in formal command power (as expressed, for example, in the number of corporate headquarters in a city). Rather, building on the literature detailing shifts in service industries, she argues that management and coordination functions of global firms have become so complex that their headquarters increasingly outsourced these functions to specialized service firms. From that follows a double argument which constitutes the conceptual core of Sassen’s line of reasoning.

  • Firstly, she claims that producer service firms accommodate a demand that emerges with globalization in its current form. Companies with global operations have actual organizational needs for producer services, because the ‘capabilities for global operation, coordination, and control […] need to be produced’ (Sassen 2001, xxii). Producer services are required to connect the globally dispersed economic activities of a firm, and they also contribute to the governance of these activities, whereby governance is understood implicitly – as a ‘kind of embedded governance – embedded in the lawyering, the accounting and the investment choices of the firm’ (Sassen 2010, 158). Moreover, Sassen relates the rise of the producer service sector to the growth and global integration of financial markets and to the increasing financialization of economies, which all ‘require a vast infrastructure of highly specialized services’ (Sassen 2001, 84).

  • Secondly, Sassen asserts that producer services are subject to agglomeration economies. They concentrate in global cities because of their dense, knowledge-rich and technology-enabled environments. The overall centrality in the world economy that these cities achieve stems, thus, from their function as ‘a space for the production of organizational commodities needed by firms and markets to operate globally and to shift national wealth to global circuits, and […] this entails command functions that are distributed across those operations’ (Sassen 2010, 158).

Sassen also alludes, although without going into much detail, to cross-border relations as a characteristic feature of global cities. Because the offices maintained by producer service firms in different cities operate in a division of labor, this ‘subsector in each city can be conceived of as part of a network that connects global cities across the globe through firms’ affiliates or other representative offices’ (Sassen 2002, 8). Because of this division of labor between producer service firms, relationships between global cities are characterized by a division of functions rather than by simple competition: there is, in Sassen’s (ibid., 31) words, ‘no such entity as a single global city as there could be a single capital of an empire; the category “global city” only makes sense as a component of a global network of strategic sites’. What the IWCNM essentially does, is to operationalize this notion.

In sum, the global city paradigm consists of four interrelated major claims. Firstly, global cities are clusters for producer service firms, which are key agents both for the servicing and controlling of cross-border operations of firms and for the financialization of non-finance firms. Though in the global city literature the clustering of producer services is seen as the result of agglomeration externalities, the argument goes beyond the line of reasoning in agglomeration economies research. It is a key contention of both Friedmann and Sassen that global cities are, secondly, centers for the management of the world economy, and, thirdly, also centers for its governance. Thus, in addition to localized externalities, external inter-firm relations are critical to the conceptualization of global cities. The functional linkages which underlie global city formation span between producer service firms and client firms which engage in cross-border business activities: For Sassen (2001, 359, 361; emphasis added), the ‘key indicator of global city status is whether a city contains the capabilities for servicing, managing, and financing the global operations of firms and markets. […] The question is whether coordination and specialized servicing of global firms and markets is taking place’. Emphasizing that this functional specialization is the distinguishing mark of global city-ness does of course not imply to reduce the urban economies of such cities to producer services – even small global cities contain a broad range of economic activities. Fourthly, producer service firms are organized in a cross-border division of labor, and that is why global cities operate in a worldwide network. In the next section I will discuss what methodological implications arise from such an economic geography perspective on global cities.

Methodological implications

Based on my understanding of the global city concept, three needs for empirical research emerge: the clustering of producer services in global cities must be shown; the role these producer service firms play in the management and the governance of global operations of firms must be confirmed and understood2; and the worldwide division of labor and the city network in which these firms operate must be assessed empirically as well as theoretically. These tasks call for different research strategies, including both quantitative and qualitative approaches for the collection and creation of attribute as well as of relational data.

A starting point to empirically corroborate the global city concept is to compile existing attribute data on the size, growth dynamics and compositions of the producer service sector in a specific city. Interesting enough, most global city researchers who have dealt with producer services had less interest in this sector as such, but were more concerned with the (potential) relationships between the ascent of producer services and the polarization of labor markets, incomes and spatial structures in (emerging) global cities. Nevertheless, and apart from the fact that there are no statistics at hand that allow for a quick overview of the producer service sector in cities around the world, it should be a relatively easy empirical job to collect data on valued added and employment in producer services in cities around the world. In addition, it is necessary to locate both the headquarters and affiliates of globalized producer service firms, because it is these firms that are supposed to have the highest capability for servicing, managing, and controlling the global operations of firms. This, by the way, is exactly what GaWC does, though these data have not been published as such, since they serve as ‘raw material’ for the IWCNM and the subsequent network analysis.

Attribute data are, thus, not as inadequate as many critics suggest (e.g. Nordlund 2004). They are, however, insufficient to comprehensively assess global city formation because the existence of a large and globalized producer service sector per se does not tell us whether a specific city is a center for the management and the governance of cross-border economic activities. And here lies a difference to agglomeration economies: Global city research is not primarily concerned with explaining the clustering of producer services, but with the functional role of producer service clusters in global cities. Therefore, and in ‘order to establish whether the variety of producer services likely to be present in any major city include this capability (for servicing, managing, and controlling the global operations of firms; C.P.), we need a far more disaggregated analysis of the producer services sector’ (Sassen 2001, 359). The first task of such an in-depth analysis of a city’s producer service sector is to confirm the demand for these services by companies with global operations and, as a consequence, the trading of producer services. This implies the creation of relational data informing about assumed3 functional linkages of global cities, that is, on connections between the suppliers of producer services and client firms either operating in global commodity chains and / or being key players in financial markets. .Such linkages can be both localized in a city or urban agglomeration (see Jacobs et al. 2013 on the relationship between the presence of multinational enterprises and the creation of new knowledge-intensive business service firms) and inter-city. In the latter case the issue of agglomeration externalities shared between distant cities emerges (Meijers/Burger 2010). Identifying and assessing such supplier-client relations is the crucial point: If trade in producer services does not exist, there’s no way that producer service firms could articulate or command other firms’ economic activities. Thus, ‘it is the firm and their client-supplier relations that are the dynamic ‘shakers and movers’ of the world city network, who have agency because they cannot ply their global business without expert labour fixed and fluid at the point of demand, interfacing with a global clientele where they sell expertise, bespoke solutions and reputation’ (Beaverstock 2007, 50). Once supplier-client relations have been identified, the second task of an in-depth analysis of a city’s producer service sector is to examine whether and how these service flows contribute to the articulation and governance of the client firms’ cross-border economic activities: (How) does a local office of a global bank or law firm help to integrate production with the global market, and (how) does it shape (or even pre-structure?) the client’s decision making processes? Thirdly, investigation into the role of producer service firms in financialization is needed: Who, for example, is in charge of the extremely complex IT infrastructure on which financial institutions’ daily business rests? (How) does a global business consultancy or accountancy firm intervene in shifting principles of corporate governance towards maximizing shareholder value?

Finally, in order to back the global city paradigm’s claim that these cities operate in a cross-border division of labor and form thereby a global urban network, the empirical challenges are to measure and to map these cross-border firm and city networks and to specify their underlying divisions of labor. Apparently, these tasks call for the creation of relational data, which can be gained by means of qualitative research strategies (e.g. Beaverstock 2002, 2004; Faulconbridge 2006, 2007) as well as by quantitative assessments. As to the latter, much has been achieved in the last decade by applying the IWCNM (see below).

The rationale(s) behind the IWCNM

Throughout the years of his engagement with cities in globalization, Taylor’s strongest concern has been the search for an appropriate method to create inter-city data. In his first publication addressing this issue he wrote: ‘Such data are not available because […] most data collection agencies focus upon attribute data, presumably due to its general ease of collection and because most (state) demands seem to favour this form of information. The only possible conclusion we can draw from all of this is that […] we must collect information specifically for our own needs’ (Taylor 1997, 325). The following year GaWC’s mission was described as being ‘to promote a different metageographical image of the world, a space of flows held together by a network of cities’ (GaWC 2012a). Some years later, Taylor (2004, 1) introduced his book on the world city network by stating that ‘(t)his neglect of the external relations of cities […] is the subject matter of this book’. In the most recent account – the ‘International Handbook of Globalization and World Cities’ (Derudder et al. 2012a) – Taylor and his GaWC colleagues present their research as ‘relational urban studies’: ‘(W)e are part of a recent tendency to foreground the role of ‘relations’ in social research; our relational geographies pivot on cities’ (Derudder et al. 2012b, 1).

While the leitmotif of Taylor’s research remained the same, the rationale offered for the necessity to create inter-city data has changed over the years. In the late 1990s Taylor approved of the then dominant interest in arranging cities in a global order, affirming that his particular concern was to empirically buttress the notion of a world city hierarchy, which ‘is a common assumption underlying this field of research […] For much world cities research, however, the idea of a hierarchy is left floating in the background, something vaguely obvious, presumably on the grounds that cities are inherently hierarchical in their relations. […] (T)he idea of a hierarchy needs fresh empirical grounding and theoretical interpretation’ (Taylor 1997, 323f). Some years later he repeated, together with some GaWC colleagues, that ‘(a)n Achilles heel of world city research is the lack of available data that quantifies the changing positions of cities in the world city system and hierarchy’ (Beaverstock et al. 2000, 43).

Taylor’s interest in the hierarchy of world cities was never a curiosity for rankings. Rather, he stressed that his preoccupation with creating relational data was derived from the concern for the structural features and dynamics in the making of these hierarchies: ‘And yet for any study of hierarchy it is relations between cities that are the vital indicators of structure. […] Attribute data can […] never show the structure of a hierarchy. Ranking produces only an ordered list. It tells us nothing about the relations between the objects on the list. Since the concept of hierarchy is intrinsically relational, it can only be defined through data ordered as a network […] For any study of hierarchy, therefore, attribute data are of limited utility’ (Taylor 1997, 324f; emphasis added).

Some years later, however, Taylor’s concern shifted from comprehending the global urban hierarchy to specifying the world city network: ‘World cities are generally deemed to form an urban system or city network but these are never explicitly specified in the literature. […] The need for a precise specification of the world city network is obvious. Without it there can be no detailed study of its operation – its nodes, their connections, and how they constitute an integrated whole’ (Taylor 2001, 181). Referring to a world city network rather than to a hierarchy of such cities was, of course, more than just using a new vocabulary. The clarification of the subject matter as being urban network studies had much to do with Taylor’s turning to the work of Jane Jacobs (e.g. 1984). She is the first of the four ‘guiding lights’ to be mentioned in the prologue of the ‘World City Network’ (Taylor 2004, ix), and it is her way of thinking which has informed the theoretical chapter of this particular book. Specifically, Taylor draws strongly on Jacobs’ idea that cities need the exchange with each other to be economically dynamic, whereby external relations of cities are characterized by cooperation rather than by competition. Referring to Jacobs, Taylor came to explicitly reject the notion of urban hierarchies: ‘Jacobs avoids the ubiquitous world cities position of always seeing cities in hierarchies. This hierarchical presumption is the bane that world cities research inherited from the urban systems tradition’ (ibid., 31).

In sum, Taylor’s rationale for the development of the IWCNM builds upon three assertions:

  • Because, according to Jacobs, the economic vibrancy of cities develops from inter-city exchanges4, ‘(t)he external relations of cities are not an optional ‘add-on’ for theorizing the nature of cities. Connections are the very raison d'être of cities. There is no such thing as a single city operating on its own. […] This book (on the world city network, C.P.) is […] a reassertion of external relations as the second nature of cities’ (Taylor 2004, 1f).

  • Because world cities are seen to be very vibrant and innovative places, ‘(t)his idea is indeed central to the world city literature, in which these cities provide a stimulating milieu, variously conceptualized, for information, knowledge and creativity to intersect in the production of new service commodities’. Accordingly, ‘world cities are therefore actual, recent or potential ‘dynamic cities’, as defined by Jacobs’ (ibid., 52).

  • If cities develop their innovative power only in exchange with other cities and if world cities are particularly vibrant, then world city-ness can only emerge from relations within a world city network. From the insight that ‘the concept of world city has no meaning without connections’ (ibid., 39) Taylor drew the conclusion that any serious empirical work on world cities required the development of techniques that allowed for a standardized measuring of flows between these cities, so that comparisons across space (between different cities) and over time (connectivity changes of a particular city) were possible.

The shift from hierarchy to network studies was therefore accompanied by a shift to quantitative methods, which were seen to be more promising in producing the desired relational and comparable inter-city data than the qualitative approaches proposed in earlier writings (Taylor 1997, Beaverstock et al. 2000). As Taylor stated in 2001 (182; emphasis added): ‘The particular purpose of this paper is to specify the world city network so that formal network analysis can be applied’.

Assessing the IWCNM’s contribution to empirically corroborating the global city concept

Any assessment of the IWCNM must keep in mind that Taylor never pretended to reveal the whole ‘dirty little secret of world cities research’ (Short et al. 1996). Put differently: the IWWCN approach does not aim or purport to present a comprehensive account of cities in globalization. Rather, Taylor has limited himself to one specific aspect of the data void: as has been shown in the previous section, the model was worked out to portray the way in which world cities are connected to each other. I think it is fair to say that in this regard the IWCNM has been quite successful. Numerous studies now allow for an unrivalled empirical account of the world city network and of its transformations in the last decade (for a brief overview see Derudder and Parnreiter, this volume). Though the ‘world according to GaWC’ (GaWC 2012b) remains an assumption (neither Taylor nor his colleagues have ever claimed to dispose of ‘hard’ data on ‘real’ flows), for my intellectual taste and research interest the results are reliable enough to work with, mainly because through their focus on producer service firms the GaWC studies theoretically outperform competing approaches to assessing the world city network (for a discussion of such approaches see Derudder 2006). Conceding that improvements in measurement techniques are certainly always possible (see the contributions of Liu et al., Meijers et al. and Neal in this volume), there is broad consensus today that the IWCNM represented ‘an extraordinary advance’ (Sassen 2012) in the challenge to measure connections among world cities across borders.

However, the IWCNM has not helped us to better comprehend the unevenness of relations between (firms in) these cities. The division of functions and hence the specific character of the cooperation between global cities, to which Sassen alludes and which is a fundamental aspect in Taylor’s line of reasoning, has so far not been properly addressed. The IWCNM’s connectivity values are based on the size of the offices of producer service firms, but size cannot be translated straightforwardly neither into global importance nor into power relations. Firstly, a producer service firm’s size does not determine the share of its cross-border clients. A sizeable national accountancy firm which operates since a couple of years in a global network might nevertheless have more business cases stemming from its long local tradition than a smaller advertising firm specialized on global clients. Secondly, the IWCNM does not distinguish between the sub-sectors of the producer service economy. Such differences do, however, exist: A minor local office of a global law firm might have more bearing on the economic decision making of its client than a mid-sized office of an accountancy firm in the same city. Thirdly, even within one sector of producer services the importance of an office – and hence the ‘up’ and ‘down’ in uneven relations – might change from case to case. In accountancy, for example, the firm-intern hierarchy depends on the city from whence the client comes. The offices of KPMG or Deloitte in Mexico City can, thus, have ‘global heads’ in Munich and New York and Beijing at the same time. Moreover, within each producer service firm some tasks are more relevant to governance function than others. Lawyers specialized on Intellectual Property or tax laws are likely to exert a stronger influence on the client’s position in a global commodity chain than those engaged in compliance issues (Parnreiter 2010; 2013b)

On the other hand, the IWCNM has been successful in a less noticed aspect. GaWC has mapped the office networks of the world’s biggest producer service firms – in the most recent analysis the data of 175 firms with offices in 525 cities were collected (Taylor et al. 2011). These (unpublished) attributional data provide strong empirical support for the notion that producer service firms cluster in specific cities. Moreover, the GaWC information on the office networks of the world’s biggest financial, accounting, advertising, law and management consultancy firms bears the potential of delineating the geography of global economic governance, provided that the command and control functions of global cities can be verified (see below).

That said, I suggest that it is time to engage critically with the conceptual foundations of the IWCNM. Because ‘(d)ata are not something that can be created separately from ideas about how cities operate’ (Taylor 2004, 31), it is important to interrogate Taylor’s interpretation of the global city paradigm. While the first pillar of his analysis – ‘the necessity to think of cities relationally, as the product of networking activities’ (Taylor 2004, 27; emphasis added) – is probably shared by most scholars in the field, Taylor’s second key idea, with which he specified the first notion, is much more debatable: The ‘interlocking network model of inter-city relations was devised to describe the way in which global/world cities are connected to one another in contemporary globalization’ (Taylor et al. 2008, 1080; emphasis added). Taylor thus reduces the world cities’ ‘networking activities’ to relations with other world cities, disregarding thereby that the economic management and command functions of global cities, which are central to Sassen’s argument, imply much broader ‘networking activities’. Global city formation is a function of flows from producer service firms located in global cities to firms located there or elsewhere that operate in or coordinate commodity chains (Brown et al. 2010; Parnreiter 2010), and it is a function of the formation of a global or regional financial center, which also implies inter-city linkages beyond the world city network (e.g. Bassens et al. 2010). The world city network has, thus, extensions at various geographical scales, and that is why it is built upon ramifications that link global cities to the countless non-global, but yet globalized cities5, where production for global markets is carried out.

Taylor’s narrowing of the focus solely on connections between world cities is even more problematic because he claims that the lack of data showing the relations in the world city hierarchy is ‘the Achilles heel of research on world and/or global cities’ (Taylor 1997, 323, emphasis added; cf. Beaverstock et al. 2000, 43), which suggests that he thinks of these inter-world city relations as constituting the theoretical core of the global city paradigm. The question emerges, however, whether such an interpretation matches the central arguments put forward by Friedmann and Sassen. Applying a ‘productionist perspective’, which draws intensely on Friedmann’s and Sassen’s concern with the role of specific cities in the geography of the ‘new international division of labor’ (Fröbel et al. 1977), in the last section of this paper I will argue why I think that it does not.

Global cities and the making of uneven development

It is useful to recall that for Sassen (2001, 361), the key ‘question is whether coordination and specialized servicing of global firms and markets is taking place’. Among Sassen’s suggestions as to how to operationalize this question we find the issue of global networks of producer services firms, which constitutes the conceptual basis of the IWCNM, but we also find the notion that a city must have ‘significant exports of producer services’ (ibid., 359) in order to realize the management and control functions. Now, such exports could be accomplished in trade between producer service firms, and also in intra-firm trade in this sector, as suggested by the IWCNM. However, in my reading of ‘The global city’, the quintessence of Sassen’s argument is that producer service firms in global cities export to other firms, namely those with global operations. From a bank’s initial lending of capital to initiate production, to the use of an advertising agency’s services to facilitate final consumption, the provision of producer services through global cities is essential in companies’ ‘going global’ and in linking and governing dispersed production and consumption sites. Producer services are, thus, key activities in global commodity chains, essential to their development and successful operation, and that is why the global city, from which they are provided, constitutes the ‘service sector nexus’ (Rabach & Kim 1994) in all kind of commodity chains (Brown et al. 2010; Parnreiter 2010).

Against this conceptual background I assert that Taylor’s focus on relations between world cities does not tackle the theoretical core of the global city paradigm. If global cities are critical nodes in innumerable global commodity chains, then their networking activities cover the full range of localities – from agricultural villages to manufacturing or tourism cities to global cities. Global cities are hence not only – and not even primarily – mutually constituted, as stressed by Taylor. Thus, while I absolutely agree with Taylor (2004, 39) that ‘the concept of world city has no meaning without connections’ I equally disagree with his exclusive focus on connections between world cities.

My proposition to shift attention to the flows between producer service firms in global cities and firms in manufacturing, agricultural or service commodity chains differs conceptually from the examination of inter-world city flows accomplished by applying the IWCNM. It could help to reintroduce the perspective on economic command and control functions that has guided the writings of Friedmann and Sassen, and which was still visible in Taylor’s first accounts of the subject matter. Trying to empirically substantiate the notion of a global urban hierarchy, he claimed that in order to say something meaningful about its structural features, asymmetrical relations between cities had to be considered: ‘(F)or a hierarchy to exist there has to be some notion of control up and down different levels’ (Taylor 2004, 39). We find this notion of unevenness also in Taylor’s (2006) attempt to combine a Jacobsean view on cities with a Wallersteinian world-systems analysis. Taylor argues that because only innovation can generate monopoly profits, cities that are particularly successful in ‘adding new kinds of work to other kinds of older work’ (Jacobs 1970, 51) become centers of the world economy. Now, where there are centers, there must be peripheries, because both are mutually constituted (Hopkins & Wallerstein 1977). This idea of uneven inter-city relationships has not, however, been developed further and plays surprisingly little role in IWCNM’s applications – probably because it stands in contradiction to Jacobs’ take on economic development in general and inter-city relations in particular. According to Jacobs (1970, 121), ‘poverty has no causes. Only prosperity has causes’ – namely the very urban activity of breeding innovation. As noted, this capacity emerges, according to Jacobs, from inter-city relations, which she conceives as being win-win situations: ‘For Jacobs, cities come in groups and they need each other; this mutuality indicates (horizontal) network relations rather than (vertical) hierarchical relations’ (Taylor 2012, 53).

In such a relational perspective, one could indeed argue that global cities ‘draw their importance from these transnational networks’ (Sassen 2001, xxi; emphasis added), because a global city’s capability for managing and controlling cross-border economic activities results from its connections to other global cities. It is only through the worldwide networks of producer service firms that their clients get into the multiple local knowledges necessary for conducting business in Mumbai, Johannesburg and São Paulo. Thus, to produce the key resource of producer service firms – knowledge – both access to local conditions and experiences and their communication through transnational networks are needed (cf. Beaverstock 2002, 2004; Faulconbridge 2006, 2007; Parnreiter 2010, 2013b). However, I maintain that this mutuality is a win-win situation only for some, namely the firms engaged in the production and trading of core economic activities such as highly valued services. Whether being embedded into the (more or less) horizontal relations that constitute the world city network is advantageous for whole urban economies and societies is actually subject to debate, as suggested by the literature on the relationship between globalization and polarization (e.g. Marcuse/Kempen 2000; Moulaert et al. 2004). Moreover, core economic activities, whose production is facilitated by (more or less) even inter-global city relations, are deployed to create and maintain the (very) uneven relationships of the global or regional divisions of labor. While it is, for example, true that the city network of the Hanseatic League not only served the interests of the merchants in leading cities such as Lübeck or Cologne, it is also true that Kontor cities such as Novgorod or Bergen obtained economic stimuli not abstractly through their privileges, but because they functioned as nodes for the transfer of resources from hinterlands in the East and North to the West, namely to the rising economic centers such as Flanders, Brabant and the Northern Netherlands (Braudel 1986; Dollinger 2012). Similarly, on the West African coast, the economic growth of cities was spurred by their pivotal role in the triangular slave trade, which enriched, for example, Lagos’ nobility and made the city to an important port (Mann 2007). It is therefore true that some mutuality existed between Lagos’ kings and the merchants from Lisbon or London. Yet, this mutuality was deeply embedded into hierarchical relations between the transatlantic slave traders and their local partners. Furthermore, the win-win situation for slave traders in Lisbon and Lagos was sustained by very uneven relations between Lagos and the towns and villages in its hinterland that had to supply the slaves.

The idea that inter-city relations are needed to create and sustain uneven divisions of labor has been highlighted by André Gunder Frank in a spatialized account of the ‘development of underdevelopment’: Delineating the Latin American city as a bridgehead for the interests of the dominant centers of the world economy, he argued that ‘(j)ust as the colonial and national capital […] become the satellite of the Iberian (and later of other) metropoles of the world economic system, this satellite immediately becomes a colonial and then a national metropolis with respect to the productive sectors and population of the interior. […] Thus, a whole chain of constellations of metropoles and satellites relates all parts of the whole system from its metropolitan center in Europe or the United States to the farthest outpost in the Latin American countryside. […] we find that each of the satellites […] serves as an instrument to suck capital or economic surplus out of its own satellites and to channel part of this surplus to the world metropolis of which all are satellites’ (Frank 1969, 6).

In such a reading, cities are not only engines of economic growth and social development, as stressed by Jacobs and, more recently, by World Bank economists (Ravallion et al. 2007). Rather, they are, thanks to the power they obtain through their network connections, also places where exploitation is organized. Against the backdrop that the world (economy) is not flat, Frank’s idea of the role of cities in the making of uneven development matches up perfectly with Friedmann’s (1995, 22) notion that world cities ‘articulate larger regional, national, and international economies’ as well as with Sassen’s (2001, 348) contention that ‘(t)he global city network is the operational scaffolding of […] the global economy’. The global city paradigm is therefore ‘attuned to questions of power and inequality’ (ibid., 351). One of its main merits is that it provides insights into the geography of the making of power asymmetries, rather than blurring them by suggesting a shift of attention from global cities to ‘how “global” economic processes affect all cities’ (Robinson 2006, 102).

The IWCNM, however, carries the danger of losing some critical premises of the word-systems approach, which informed the early global city research, and of diverting the analytical concern from the role of cities in the production of uneven development to a descriptive concern, namely to find the ‘best’ way to quantify inter-city relations. The prevailing emphasis on formal network analysis and on measuring connectivity between world cities has led to the disregarding of the agency in global city formation, which implies a neglect of the agency in managing and commanding the world economy. Thus, the networked perspective on power that sees world cities emerging from opportunities generated by the network configuration is not further developed to scrutinize the objectives for which this power is been deployed. The IWCNM thus helps to better understand how global city formation takes place, but provides little insights into the role these cities play in the world economy. These shortcomings obviously undermine the strength of the global city argument. Beaverstock (2011, 216), for example, has recently argued that this ‘reluctance of the key proponents of the model […] to focus their energy on researching agency in the networks’ has caused an ‘impasse in an advancement of theory accounting for the genesis of and nuances in the world city network’. The plea to focus on agency is, of course, very much in line with Sassen’s (2001, xxii; original emphasis) call for studying ‘the practices that constitute what we call economic globalization and global control’.

Yet this remains an empirical task still to be accomplished. Although the notion that global cities function as organizing nodes and as command points of the world economy is widely accepted and has been eagerly reproduced by global city researchers (including the author), little is still known, more than 20 years after Sassen’s (1991) “The global city”, about the actual practices of management and control exercised in global cities. Flows from producer service firms in global cities to companies operating in manufacturing, agricultural or service commodity chains have barely received attention (for exceptions see Schamp et al. 2004; Parnreiter 2010; Parnreiter et al. 2010; Zademach 2011; Hanssens et al. 2012), and even if so the question whether and how producer services are means for the management and the control of global operations of firms has not been explored systematically. Important insights can be won, however, from the literatures on the bearing which the financialization of non-finance firms has on corporate governance (e.g. Lazonick/O’Sullivan 2000; Froud et al. 2000; Taino et al. 2001; Muellerleile 2009) and on the emergence of transnational private governance (e.g. Djelic/Sahlin-Anderson 2006; Botzem et al. 2007).

The weak spot of the global city paradigm is, in sum, that so far only few researchers have seriously engaged with its economic geography perspective on the production of globalization processes. It is therefore no wonder that the lack of evidence on economic governance functions of global cities is used by radical opponents of the paradigm, who reject the whole concept because of its critical inquiry into the agencies and geographies of the making of uneven development, to claim that the notion of strategic control and commandis nothing other than a ‘neo-Marxist myth’ (Smith 2011).

Though the lacuna I highlight is certainly not at the root of this post-structuralist critique (wherefore it is unlikely that such accounts would recognize empirical evidence for the fact that the world-economy is, in fact, structured and controlled), verifying the – hitherto supposed – flows between a global city’s producer service firms and their clients, and scrutinizing the management and control activities embedded within them, is paramount. Despite the undeniable merits of the IWCNM, I contend that the information on inter-city connections that is now urgently needed refers to demand-supply relationships between producer service firms and firms in global commodity chains, to the associated knowledge flows, and to the agencies in command and control. Such information can only be captured by undertaking qualitative studies (see, for example, Klagge & Peter 2011; Parnreiter 2013b). More generally, Hollstein (2010) has argued that analysis of network-making calls for openness in data collection, particularly if little is known about the actual character of this process (cf. Schoenberger 1991). Accordingly, Beaverstock (2011, 217) has recently identified the acceptance of ‘the qualitative approach as a means of collecting process-based findings on different inter-city attributes and relationalities’ as one of the priorities in future inter-city research. A re-valorization of the qualitative approaches that were widely used in the first years of relational global city research (Taylor 1997; Beaverstock, et al. 1999, 2000, 2002) can also help to counter the mentioned danger of narrowing the global city approach and of redirecting research from the analytical focus (the function of specific firms in specific cities in globalization processes) to the mere description of inter-city networks or, worse, to city rankings.

In that context it is worthwhile to recall a review of Timberlake’s (1985) edited volume ‘Urbanization in the World Economy’ which contained, along with several essays by world-system analysts, one of Sassen’s first pieces on global cities. Roberts (1986, 459) criticized the fact that ‘many of the authors are preoccupied with describing and measuring the structure of the urban system, rather than exploring the processes that shape it. Relationships of inequality are taken as a given, but the mechanisms by which power is exercised and reproduced are not fully examined. This is inevitable given the reliance of most authors on global statistics. There is not enough emphasis […] on how cities and the classes within them achieve control over other regions’.


The author thanks Jon Beaverstock, Ben Derudder and two anonymous reviewers for their useful comments. The usual disclaimers apply.


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* Christof Parnreiter, Department of Geography, University of Hamburg, Germany, email:

1. While some authors use the terms ‘global’ and ‘world city’ either without further justification or interchangeably, others have stressed the conceptual differences behind the different terms (Derudder 2006). In this paper I will adopt the respective terminology of the authors I refer to. Where I allude to the general debate, I stick to ‘global cities’, since my own work draws strongly on Sassen’s (1991) ‘The global city’.

2. The focus on (potential) governance functions of producer service firms does, of course, not suggest that control functions are only ascribed to these firms. Many, if not all, global cities contain a variety of agents who might get involved in economic governance (e.g. headquarters of corporations, international institutions, governments, etc.).

3. Input-output matrixes, for example, show linkages between economic sectors, but are usually available on a national scale only and cannot be broken down on an urban, let alone firm level.

4. There is, yet, a second notion in Jacobs’ work, namely that cities are dynamic not despite, but because of the problems that they face and which call for new solutions.

5. While Marcuse and Kempen (2000) use the term ‘globalized cities’ to suggest a shift of attention from global cities to how globalization affects all cities, I use ‘globalized cities’ to denote the opposite, namely the difference between the role of cities in engendering globalization and the impacts of globalization on cities.

Edited and posted on the web on 14th October 2013

Note: This Research Bulletin has been published in Tijdschrift voor Economische en Sociale Geografie, 105 (4), (2014), 398-411