Exploring the Shifting Geographical Pattern of the Global Command-and-Control Function of Cities

Abstract

In recent years, some cities have experienced significant growth in terms of command and control functions of cities, and thus have managed to relocate themselves to a much upscale position in the global economy. The main goal of this study is to examine the command-and-control function of cities and the impact of the relocation of corporate headquarters on a city’s command-and-control function. The study examines the changes in the revenues of companies located in selected cities and countries and measure the command-and-control function (“C&C”) of cities that well illustrates the strength of cities and countries in the global economy. To achieve our goals, we employ a composite indicator, the Command and Control Index that integrates such fundamental financial data of companies as revenues, profits, market value, and assets. In the analysis, we consider the companies that are listed by Forbes Global 2000. Our findings reinforce that the command-and-control function of the traditional centers of corporate headquarters has been lessening for a while, whereas cities located in developing countries and China in the first place have been occupying an increasing position in the global command and control. Now, we are experiencing the robust growth of Beijing’s command-and-control function index, and the decline of that index of the former leaders (i.e., New York, London, and Tokyo). We can also draw the conclusion that the migration of headquarters does not significantly impact the change of cities’ command-and-control function. In addition, when relocating the headquarters, most companies have remained within the same country and some of them have not even left the metropolitan area itself. In recent years, the number of those companies that have relocated the corporate headquarters has increased, and they have experienced increase in their revenues as well. To attract more corporate headquarters, cities has to offer an attractive environment for companies which strategy should be supported by such governmental initiatives as the reduction of corporate taxes for relocated companies.