More than FinTech? The Convergence of Global Production Networks and Global Financial Networks through Inter-Sectoral Mergers and Acquisitions

Keywords: FinTech, Global Production Networks, Global Financial Networks, Convergence
Session Type: Virtual Paper Abstract
Day: Tuesday
Session Start / End Time: 3/1/2022 08:00 AM (Eastern Time (US & Canada)) - 3/1/2022 09:20 AM (Eastern Time (US & Canada))
Room: Virtual 12

Abstract

There is no escape from FinTech. Whether paying for groceries, ordering items online or undertaking academic research in the field of financial geography, FinTech is everywhere. However, with so much attention devoted to FinTech, a question seldom asked, yet alone answered, is which sectors other than technology are converging with finance under contemporary processes of globalization and financialization? We explore this question by analysing the scale, structure and geographies of inter-sectoral mergers and acquisitions (M&As) in and out of the financial sector. Drawing from a sample of 25,079 deals between 2001-2020, we reveal which sectors are buying and being bought by financial firms, the geographies of this process, trends over time, and the key factors driving inter-sectoral activity. Analysed through the Global Production Networks (GPN) 2.0 framework, and contributing to debates around financial discipline, our findings uncover the growing convergence of finance with other sectors through an increasing share of inward (non-financial firms acquiring financial firms) and outward (financial firms acquiring non-financial firms) M&A deals. However, far from homogenous, this process of convergence is shown to be temporally, sectorally, and spatially uneven. This allows us to make two novel contributions. First, we provide fresh insights into the role of financial discipline in reconfiguring GPNs at country-level. Second, we problematize the dichotomy between the real and financial economies by revealing how, where and why the boundaries between the financial and other sectors are becoming increasingly blurred. Ultimately, this shows that financial sector convergence extends much further beyond FinTech.