Cite as:
Clark G L, Wójcik D, 2005, "Path dependence and financial markets: the economic geography of the German model, 1997 – 2003" Environment and Planning A 37(10) 1769 – 1791
Download citation data in RIS format

Path dependence and financial markets: the economic geography of the German model, 1997 – 2003

Gordon L Clark, Dariusz Wójcik

Received 29 January 2004; in revised form 8 October 2004

Abstract. The academic community seems divided into two camps: those who emphasise global finance and capital market integration and those who emphasise the economic geography of distinctively local regimes of accumulation. In the first instance, flows of capital and the corrosive forces of global economic competition are assumed to drive institutional convergence. In the second instance, the stability of relationships and inherited institutions presupposes the necessity of path dependence. There is hardly ever dialogue between these camps except for mutual disregard and antagonism. In this paper we seek a rapprochement between these two world-views. In doing so, we focus on recent developments in continental Europe and particularly in Germany. In contrast with Anglo-American expectations, we argue that the German model is hardly a model at all; it has a distinctive economic geography apparent in capital market structure and performance. We also argue, moreover, that the past is not the future: there is evidence of the adoption of financial practices and institutions consistent with the Anglo-American model and inconsistent with the inherited German model. Our goals are twofold. We demonstrate the significance of economic geography for understanding German capital market structure and we seek to explain how path dependence may unravel and the forces driving institutional convergence can emerge within the context of the past. In this respect, our goals are both empirical and theoretical and have implications for conceptualising the status and significance of economic geography.

Restricted material:

 Full-text PDF size: 410 Kb

 References  34 references, 10 with DOI links ()

Your computer (IP address: 107.20.129.212) has not been recognised as being on a network authorised to view the full text or references of this article. If you are a member of a university library that has a subscription to the journal, please contact your serials librarian (subscriptions information).