Construct Validity in World City Network Research: From Office Location Networks to Inter-Organisational Projects in the Analysis of Intercity Business Flows

Abstract

The Interlocking World City Network Model (IWCNM) and other office location approaches (OLAs) have become the most widely used empirical models of the world city network (WCN) over the last two decades. Despite numerous methodological improvements, they still rely on Taylor’s (2001) legacy of using data on office locations of firms to indirectly estimate intercity business flows. Notwithstanding criticism from both within the mainstream of the global and world cities research as well as postcolonial and poststructuralist geographers, OLAs maintain their dominant position in recently published research. To advance the dialogue on the appropriateness of OLAs as empirical models of WCN, we consider their construct validity by examining the link between theory and empirical models. We uncover evidence that calls into question the validity of OLAs for empirical modelling of intercity business flows. In the spirit of no deconstruction without reconstruction, we develop a new model based on directly observable business flows, which we call the inter-organisational project approach (IOPA). We deductively argue for IOPA’s construct validity as an empirical model of the WCN and offer empirical evidence for its structural validity. We demonstrate it using a global sample of 161,114 investment bank syndicates in the 2000 – 2015 period.

Keywords: Interlocking World City Network Model (IWCNM), intercity business flows, financial and business services, advanced producer services, world city network, construct validity

JEL Classification: F30, F65, G24, L10, R10