Two proxies for city level globalization which look at cities that have attracted business in finance, accounting, and advertising (global city 3) and those that have a transparent way of allowing firms to set up a business (business dummies) are better governed in all dimensions of governance.

# **TABLE 6: DETERMINANTS OF CITY GOVERNANCE – SYNTHESIS OF ECONOMETRIC REGRESSION RESULTS**

|**Source**|**EOS 2003**|**EOS 2003**|**EOS 2003**|**EOS 2003**|**EOS 2003**|**EOS 2003**|**EOS 2003**|
|---|---|---|---|---|---|---|---|
|**Dependent Variables**|**Low Bribery in**<br>**Utilities**|**Low Informal Money**<br>**Laundering**|**Low Street Crime**|**Red Tape Cost of**<br>**Imports**|**Low Bribery to affect**<br>**laws**|**Low Diversion**<br>**public funds**|**Low Illegal Party**<br>**Financing**|
|**City Variables**|**1-7 (good)**|**1-7 (good)**|**1-7 (good)**|**1-9 (bad)**|**1-7 (good)**|**1-7 (good)**|**1-7 (good)**|
|City Population|+ / '|+ / '|0 / 0|0 / 0|+ / 0|+ / '|0 / 0|
|Global City (3)|+ / '|++ / ***|+ / '|- / **|++ / **|++ / **|++ / ***|
|Country city size ratio|+ / '|+ / '|+ / '|0 / 0|+ / '|+ / '|+ / *|
|Business Dummy|++ / ***|+++ / ***|++ / **|- / '|++ / **|+++ / ***|++ / **|
|Website dummy|+ / 0|+ / '|+ / 0|0 / 0|+ / 0|+ / '|0 / 0|
|Budget Dummy|0 / 0|+ / 0|+ / 0|0 / 0|- / 0|0 / 0|0 / 0|
|Port Dummy|0 / 0|+ / '|+ / 0|0 / 0|0 / 0|+ / '|+ / '|
|Capital Dummy|0 / 0|- / '|0 / 0|+ / 0|- / 0|- / '|- / '|
|**Country Variables**||||||||
|Country Population|--- / ***|-- / '|- / 0|++ / '|-- / *|-- / *|--- / **|
|Urbanization (%)|++ / **|0 / 0|-- / '|0 / *|+ / '|0 / 0|0 / 0|
|Kearney Globalization Index|++++ / ***|++++ / ***|++++ / ***|--- / ***|+++ / ***|++++ / ***|++++ / ***|
|Income per capita|++++ / ***|+++ / ***|++++ / ***|---- / ***|++++ / ***|++++ / ***|+++ / ***|
|**# of cities**|**193**|**193**|**193**|**193**|**193**|**193**|**193**|
|**Adjusted R-squared**<br>Sources: All dependent variable<br>drawn from WDI 2002; city pop<br>drawn from GAWC (Taylor); inc<br>Source: KLM city database, dra<br>Sample size: 412 cities in 134 c<br>Values for magnitude (+,0,-) an<br>the magnitude of the coefficient<br>variable. Then we assigned ma<br>“++” for any value between 0.4 a<br>rating on the significance of the<br>indicates significance at 5%, * in<br>Values for number of cities and|**0.30**<br>s drawn from UN 1<br>ulation downloaded<br>ome per capita draw<br>wing from EOS-WE<br>ountries.<br>d significance (*,0,') i<br>rating (left hand sid<br>gnitude values acco<br>nd 0.7 ; “+” for any<br>coefficient in each c<br>dicates significance<br>R-square were com|**0.21**<br>998 and EOS 2003; glob<br>from website: www.citypo<br>n from Heston-Summers<br>F 2003 as well as other so<br>n each cell were obtained<br>e), we computed the prod<br>rding to the following crite<br>value between 0.1 and 0.<br>ell (right hand side), we a<br>at 10% and ‘ indicates<br>puted as simple averages|**0.19**<br>alization index downloa<br>pulation.de ; port, capit<br>and CIA World Factboo<br>urces as per below. Al<br>by averaging results o<br>uct of the average coeff<br>ria: for positive coefficie<br>4; and finally a “0”’for an<br>veraged the various sig<br>significance at 15%.<br>across all specification|**0.24**<br>ded from Foreign Poli<br>al, size ratio, budget,<br>k (2001).<br>l dependent variables<br>f 21 different OLS spe<br>icient magnitude acro<br>nts, we applied a “+<br>y value below 0.1. S<br>nificance levels acros<br>s.|**0.21**<br>cy Magazine, 2002 (Kearn<br>website and business dum<br>range from bad to good w<br>cifications. In particular, f<br>ss all specifications times<br>+++” for any value above<br>imilarly, minus signs were<br>s the 21 specifications, w|**0.29**<br>ey); country populat<br>mies drawn from KL<br>ith exception of cost<br>or each independent<br>twice the standard<br>1.2; “+++” for any val<br>applied to negative<br>here *** indicates sig|**0.17**<br>ion and urbanization<br>M 2004; Global city (3)<br>s of imports.<br>variable, for calculating<br>deviation of the<br>ue between 0.7 and 1.2;<br>coefficients. For the<br>nificance at 1%, **”|

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