FinTech innovation and knowledge flows in Hong Kong’s financial sector: a social network analysis approach
| DOI | https://doi.org/10.1108/JABS-09-2020-0381 |
| Published date | 08 February 2021 |
| Date | 08 February 2021 |
| Pages | 294-307 |
| Subject Matter | Strategy,International business |
| Author | Anson Au |
FinTech innovation and knowledge flows
in Hong Kong’sfinancial sector: a social
network analysis approach
Anson Au
Abstract
Purpose –This paper aims to examine how financial techno logy (FinTech) knowledge from foreign
firms flows into and among elite commercial banks in Hong Kong’s financial sector to drive
innovation.
Design/methodology/approach –Using social network analysis and regression analysis on a novel
database of patentsheld by Hong Kong’s elite commercial banks, this paper examines therelationships
betweennetwork position and FinTech knowledgeflow.
Findings –This paper finds four untold patterns of innovation and inequality in Hong Kong’s financial
sector: only threebanks are responsible for all the FinTech knowledge entering Hong Kong;most foreign
FinTech comes from the USA through Hong Kong and Shanghai Banking Corporation, whereas most
FinTech from China enters throughFubon Bank and Development Bank of Singapore; older banks and
banks with more connections to firms insideAsia are more likely to import FinTech; the most beneficial
sourcesof FinTech for a bank’s network position are firms from outside Asia.
Originality/value –Despite the well-documented volumes of cross-border and cross-continental
movementof financial institutions in Hong Kong, thereis little work on the knowledge flows that underwrite
this mobility. Thispaper addresses this gap by using FinTech knowledgeflows to map the distribution of
innovation,network position and competitive advantagein Hong Kong’s financial sector.
Keywords Social network analysis, Technological innovation, Knowledge diffusion,
Banks and financial institutions, Hong Kong, China
Paper type Research paper
Introduction
Over the past 20 years, one of the most important and dynamic sectors for economi c
growth in Hong Kong has been the financial sector, consisting of banking, insurance
and other services such as stock brokerage, asset management, financial leasin g and
investment and holding companies. During this time, the city’s financial sector has
steadily grown to become a powerhouse in the domestic economy in ab solute and
relative terms. It doubled its value from HK$164bn in 2000 to HK$321.4bn by 20 18.
Relative to the GDP of Hong Kong, the value contributed by the fina ncial sector
sweltered from accounting for 12.8% of Hong Kong’s GDP in 2000 to a staggering
19.8% by 2018.
Figure 1 shows the value contributed by banking, insurance and other financial
services individually and collectively in millions of Hong Kong dollars . Even moments
of temporary weakness, such as the 2003 SARS epidemic and the 20 08 Financial
Crisis, did not damper the secular growth of the financial sector. Moreover, the
already powerful hold it wielded over the Hong Kong economy consistently grew over
the years, much of which has been dominated by the city’s banks.
Anson Au is based at the
Department of Sociology,
University of Toronto,
Toronto, Canada.
Received 28 September 2020
Revised 13 November 2020
Accepted 16 December 2020
PAGE 294 jJOURNAL OF ASIA BUSINESS STUDIES jVOL. 16 NO. 2 2022, pp. 294-307, ©EmeraldPublishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-09-2020-0381
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