Critiquing Construct Validity in World City Network Research: Moving from Office Location Networks to Inter‐Organizational Projects in the Modeling of Intercity Business Flows

Abstract

The interlocking world city network model and other office location approaches (OLAs) have become the most widely used empirical models of the world city network (WCN). Despite numerous methodological improvements, they continue to rely on a legacy of using data on office locations of firms to indirectly estimate intercity business flows. To advance the dialogue about how to improve on existing empirical models of the WCN, we examine the content, construct and structural validity of OLAs. We analyze the link between the theoretical construct of intercity business flows and network projections obtained from office location data and uncover evidence that calls into question the validity of OLAs as empirical models of the WCN. In the spirit of no deconstruction without reconstruction, we then develop an alternative empirical model of the WCN, based on directly observable relational ties among APS firms, which are formed through co-production of complex services. We call this the inter-organizational project approach (IOPA). We 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.

Spatial Differentiation of Variegated Capitalisms: A Comparative Analysis of Russian and Australian Oil and Gas Corporate City Networks

“…The empirical models of the WCN target intrafirm relationships based on ownership structure and office locations, thus, potentially omitting a large portion of network data on interfirm relationships. There are concerns whether the network structure derived from office location data is representative of the actual intercity flows of resources, knowledge, capital, and labor (Neal 2012;Pažitka, Wójcik, and Knight 2019). Studies on global production networks/commodity chains (Parnreiter 2010), interlocking directorates (Heemskerk and Takes 2016), and interorganizational projects (Pažitka, Wójcik, and Knight 2019) provide ways to examine interfirm relationships.…”

“…There are concerns whether the network structure derived from office location data is representative of the actual intercity flows of resources, knowledge, capital, and labor (Neal 2012;Pažitka, Wójcik, and Knight 2019). Studies on global production networks/commodity chains (Parnreiter 2010), interlocking directorates (Heemskerk and Takes 2016), and interorganizational projects (Pažitka, Wójcik, and Knight 2019) provide ways to examine interfirm relationships. However, there is extreme difficulty in collecting data on interfirm networks on global and national scales as well as quantifying the dynamic flows and relations of a different nature (Pan et al 2017).…”

Analysis of spatial networks from bipartite projections using the R backbone package

“…Formal validation is challenging because it requires both spatial bipartite data to which backbone can be applied, and an independently measured unipartite network to which the resulting backbone can be compared. Preliminary work has attempted to validate bipartite projections as a measurement of world city networks by comparing them to airline traffic networks (Taylor, Derudder, & Witlox, 2007), banking networks (Pažitka et al, 2019), and alternative backbone models (Neal, 2014b), but a more general validation of spatial bipartite projections is needed. The availability of the backbone package offers a necessary methodological tool for pursuing this research.…”

“…It rests on the logic that offices of the same firm must communicate and interact with one another, and therefore that when two cities have an office of the same firm, there is likely interaction between them. Spatial networks adopting the locations-as-agents approach to measurement via bipartite projection are quite common at multiple spatial scales, and have recently been used to measure networks among urban locations connected by twitter users (Poorthuis, 2018) and bus routes (Liu & Duan, 2020), networks among cities connected by patents (Balland & Rigby, 2017) and banking syndicates (Pažitka, Wójcik, & Knight, 2019), and networks among countries connected by treaties (Hafner-Burton et al, 2009), trade (Straka, Caldarelli, & Saracco, 2017), and corporate executives (Heemskerk, Fennema, & Carroll, 2016).…”

The competitive advantage of regions: economic geography and strategic management intersections

“…Early work by Porter, for example, highlighting the importance of geographical clusters in firms' strategic location decisions, has been picked up by both fields (Porter, 1985(Porter, , 1990. Moreover, the role of spatial forces in competitive advantage has become a recurring theme, such as the importance of firm performance to local embeddedness (Martin & Sunley, 2003;Wei, 2015), the role of boundary spanners (Schotter & Beamish, 2011), and the role of information and knowledge flows as enablers of internationalization in action (O'Farrell, Zheng, & Wood 1996;Pažitka, Wójcik, & Knight, 2019;Wójcik, Knight, & Pažitka, 2018). More recently, both fields have embraced a dynamic turn, focusing on the ways in which competitive advantage is a processual phenomenon that evolves and changes over time (Fratesi, 2015;Knight & Wójcik, 2017).…”