which we wish to explore. We would like to investigate empirically what determines the staying power of cities in their performance on a global scale, and whether governance has anything to do it.

Empirical analyses that have been done using the first definition of a globalized city—a city as a place interacting with the global space—have included a number of indicators such as the seven defined by Friedman (1986): (a) the financial assets of a city such as its capital and equity markets; (b) a city’s endowment of key infrastructure which firms and citizens would respond to in terms of their decisions to locate there, exit to alternative options, or push to get governance reforms that would allow them to receive improved services;<sup>5</sup> (c) the size of the city in terms of its population with the assumption that benefits of agglomeration are important; (d) the availability and concentration of key business services and advanced producer services such as credit rating, risk management, and multijurisdictional law; (e) the importance of a city’s manufacturing output; (f) how many Transnational Corporations have located their headquarters in a city; and (g) the presence of international institutions in the city.

Other authors have used indicators such as the presence of internet domain names (Townsend, 2001); the extent of public-private partnerships (Kresl, 1995); measures of cultural vitality (Smith and Timberlake, 1995); the proportion of foreign residents in the city (Doel and Hubbard, 2002); and the numbers of service sector employees in the city (Doel and Hubbard, 2002).

Very few authors have carried out empirical investigation using the second definition of globalized cities, which considers scale (size of a city, size of its economy including the size of private sector activity) or services (access to infrastructure and social services) as something produced rather than given, requiring cities to constantly perform to remain influential in a global world. New literature which focuses on connectivity of cities within a network includes that of Sassen, (2000), Castells, (2000), and Doel and Hubbard (2002). Uncovering the variables that drive the dynamics of city growth and performance interests us, and we particularly look at the role of governance, using a set of empirical tests.

From the data we have been able to gather from various sources, we can look at the effect of both the scale issue as well as the quality of services and investigate the Friedman (1986) and Townsend (2001) hypotheses.<sup>6</sup> 5 Kyu Sik Lee and Alex Anas in “The Benefits of Alternative Power Tariffs for Nigeria and Indonesia” (1996), demonstrate how companies locate in a city and if they do not find the services they need either invest in their own generation, thereby exiting the system, or put pressure to get better services, with potential improvements in local governance, or relocate to cities with better services.

6 The Taylor database gives us data on financial/banking companies located in a city, as well as data on the availability of key companies in law, accounting, and advertising, all measures of indicators (a), (d), and (f) in the Friedman (1986) hypothesis. From the UN and KLM databases we get measures of key infrastructure endowments (indicator (b)). City size (indicator (c)) is obtained from the website: http://www.citypopulation.de. We use the Kearney composite measure of globalization for measure (e) and have collected web statistics that show whether a city has a website and if it posts budget information or business information there to capture the Townsend (2001) indicators. The only measure we do not use in our analysis is the presence of international institutions in the city.

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