Environment and Planning A: Economy and Space

Research on the restructuring of financial markets in advanced industrial countries has focused primarily on the consequences of changing regulation and of concentration of capital and control. At an international geographic scale, these processes have produced strong financial centers and new outposts for capital transactions. They have also resulted in the reworking of domestic capital markets with significant consequences for the location of economic activities and access to financial services. In Mexico the financial infrastructure is ‘thin’ both with respect to the variety of institutions and in space. As a consequence of privatization and state innovation, a financial infrastructure is developing with important implications for access to capital by different segments of the economy and regions. This new financial infrastructure has a distinctly bimodal character. We describe the development of the Mexican financial infrastructure after financial market restructuring and speculate on the consequences for economic development, including its spatial dimension.

One of the most important outcomes of federal reregulation of the financial services sector since 1989 has been the completion of the shift from locally organized flows of credit to the housing sector, to a national mortgage-backed securities (MBS) market. In this paper the way in which the rise of MBSs has reshaped access to credit across social and spatial divisions is examined, and the implications of battles to shape the MBS market and of the practices of the two principal agencies in that market for the geography of financial exclusion are explored. Although the reregulation of the government-sponsored secondary markets promises to help break down entrenched patterns of financial exclusion, the government-sponsored enterprises are placed in the complex position of mediating social demands for more inclusionary credit practices and investor demands for continued high returns and low risks. It is unclear whether reform efforts will be sustained in the new political and economic environment of the mid-1990s.

The significance of race in mortgage lending has emerged as a major public policy issue and focus of scholarly research in the United States. In this paper the experiences of black and Latino mortgage loan applicants in a large midwestern metropolitan area are examined by means of a database on the disposition of individual mortgage loan applications that is now available. It is found that, after controlling for income, age of housing, housing value, and occupancy status, black applicants and applicants from predominantly black communities are less likely to have their loan applications approved than are white applicants or applicants from predominantly white areas. Although no disparities were associated with Latino applicants, those applicants from predominantly Latino communities were less likely to be approved than were others. Specific research and policy recommendations are offered to develop a further understanding of the racial implications of the mortgage market and for reducing racial disparities in accessing credit for home purchases.

A changing regulatory environment, intensified competition, and the increasingly global and privatised nature of financial markets have taken a heavy toll on the US banking industry. In the 1980s over 1100 banks failed in the United States, more than in any decade since the 1930s. In this paper I examine the relationship between the eroding competitive position of the banking industry and an unfolding geography of financial exclusion affecting one low-income community in Los Angeles. First, I briefly outline the causes of banks' deteriorating competitive position, focusing on the mismatch between domestic financial regulation and the requirements of competition in retail markets through the 1980s. Second, I draw on research, using secondary sources and workplace-based interviews, to describe how some banks in Los Angeles are responding to these pressures by reorganising their production systems at an interregional, intermetropolitan, and intrametropolitan scale. Third, I concentrate on this intrametropolitan scale, documenting the rationalisation of branch networks and the rise of alternative financial institutions in part of South Central Los Angeles. To which communities are banks and their less regulated competitors to be held accountable? By way of conclusion, I argue that regulation needs to clarify this issue while also supporting the development of community-controlled financial institutions that can expand access to financial services in low-income neighbourhoods.

In this paper the implications of the two eras of financial transformation in the 20th century—that of the 1930s and that of the 1980s and 1990s—for urban growth and inequality in Southern California are examined. It is argued that financial structures have profound effects on the pace and distributional consequences of urban growth, in large part because urban development is characterized by widespread spatial spillover effects. The contemporary era of financial transformation has widened gaps between urban communities and banking customer markets. Banking markets that were once segmented by regulation are now segmented by market dynamics. In consequence, a financial system which once facilitated wealth building for households and communities now deepens social inequality and spatial separation. In this paper the historical and contemporary experience of Los Angeles is used to both develop and illustrate the arguments made.

In this paper I examine empirically the largely unexplored proposition that the intraurban location and pricing of warehouse and distribution (W&D) facilities are inextricably linked to the intraurban geography of retailing, production, transportation systems, ‘warehouse’ labor, and local zoning. Estimated reduced-form W&D rent functions suggest that the influence of these predictors varies across small and large W&D facilities, presumably differing in the geographic scope of their operations. Small W&D facility rents are seen to be determined by the multiplicity of location factors already mentioned; in contrast, large W&D facility rents, seemingly unaffected by local market access and local zoning controls, are found to be mostly driven by surface and air-transportation access advantages. Overall, these findings suggest a role for a public policy aiming at facilitating the functioning of the W&D sector within contemporary metropolises.

The expansion of urban areas both changes and displaces rural communities along the urban fringe. This is not a new phenomenon and geographic research has paid considerable attention to understanding these urbanization pressures. Previous research, however, has paid less attention to the implications of these pressures and changes on the preexisting rural community and almost no attention to the opposition which local residents may raise in efforts to protect their community from the disruption of change. This paper is about resistance. The example of Columbia Valley, a small rural agricultural area about one hour's drive east of Vancouver, British Columbia, is utilized to explore the opposition this community has mounted against two recent large-scale development proposals. Both proposals would have significantly changed the nature of the area and the local community. In both cases, the resistance mounted by this community played a key role in preventing the proposals from proceeding. Also, in both cases, the resistance was founded to a considerable degree upon residents' desire to protect the lifestyles and livelihoods currently existing within their local community. This rural activism suggests that residents are concerned about urbanization pressures and that local ideas of community and lifestyle may have some force in operationalizing public opposition to radical change.

In this paper we compare the competitiveness and performance of samples of business service offices located in two peripheral regions of the United Kingdom: Northern Ireland and Wales, and peripheral Republic of Ireland by making matched comparisons with counterparts in a core region—South East England. Offices in South East England are characterised by faster growth, higher productivity, wider markets, and greater export penetration than their counterparts in the other regions considered. The relative strengths, weaknesses, and constraints on raising productivity and competitiveness of peripherally located firms are examined. Special consideration is given to markets served, spatial structure of markets, locational constraints, and the adequacy of equipment and qualifications. An important factor influencing competitiveness is the ability of an office to provide high-quality specialist services, and alternative policies for achieving this aim are considered.

The United States 1990 Clean Air Act Amendments set aggressive goals for state-level compliance and mandates for the use of employer trip-reduction (ETR) programs for certain regions. San Diego County, California, has responded to this mandate with its own trip-reduction regulation. The direct effects of the trip-reduction regulation fall into three categories, as follows: changes in spending, changes in costs, and changes in consumer amenities. The total effects on the local economy due to each of these categories are estimated using a Regional Economic Models, Inc. (REMI) forecasting and simulation model for San Diego County. This study is the first to use such a comprehensive methodology for an analysis of an ETR program. The study results show that spending effects on employment were positive, as local transit use replaced automotive-related expenditures and employees received cash incentive payments. The net increase in costs on business were modest with respect to the overall size of San Diego's economy. Consequently, the negative effects on business location due to these direct effects were also modest. There were significant effects from the program due to consumer utility reductions because subsidies and charges distorted consumer choices.