1. From New York to
Istanbul

2. So many foreign
companies in New York
Why are they here?
What do they do here?

3. Why do companies
invest overseas?
What we know Relevance for New York
Costs A good reason to leave NY
Growth ??
Taxes Dreadful
Resources In NY??
Something special about investment in cities?
Global cities?

4. What do they do when
they come here?

5. Surveys of Foreign
Affiliates in New York,
1995, 2005
The research team:
Mark Chadwin
Andreas Grein
Clifford Wymbs
Lilach Nachum

6. Why does it matter for a
Global Financial Center?
Majority – in financial services
Business services - support
Cluster effect, synergies
Shared infrastructure
Global linkages – global cities.

7. The Surveys
Population: All foreign affiliates in New
York City
 The Weissman Center Directory of
International Business
1995: Mailed questionnaire + interviews
 67 responses
2005: Mailed questionnaire
 142 responses (~10% response rate).

8. Why do they come here?
% sample
Initially Current
Establish presence in a global center 20% 20%
Serve US clients 19 22
Exploit their firm specific advantages 20 12
Serve home clients overseas 11 11
Implement a specific activity for the entire
corporation
9 11
Access NYC local resources 8 8
Tap into industry knowledge pool in NYC 8 8
Counteract or preempt competitors’ moves 4 6

9. Firms of different size come
to NY for different reasons
•Establish a presence
•Leverage own knowledge
•Exploit current suppliers
•Use known processes
•Focus on U.S. customers
•Gain local industry knowledge
•Leverage local suppliers
•Be nimble and opportunistic
Seek disruptive advantage to
compete against larger firms
as soon as possible
Small Firms (sales < $100 mm) Large Firms (sales > $100 mm)
Leverage cash advantage
and size to create long-term
momentum

10. Size Breakdown
% totals
Number of employees Our sample Total in NYC
Up to 10 37% 54%
11-30 31 21
31-50 13 5
51-100 5 11
Over 100 14 11
Average 144 94
Median 14 10

11. What do they do here?
NY Sales % total sales
0.4
0.17
0.36
0.07
% of sample
10%
25%
50%
75-100%

12. What do they do here?
NY purchases % total purchases
0.5
0.15
0.15
0.2
% of sample
10%
25%
50%
75-100%

13. Industrial Breakdown
% sample
Financial Services 34%
Retail 15
Tourism, Eating places 13
Manufacturing 13
Business services 12
Pharmaceuticals/Chemicals 8
Other Services 5

14. NY competitors % total
competitors
0.35
0.3
0.22
0.13
% of sample
10%
25%
50%
75-100%
Competitors located
away from NY

15. Expatriates Employment
% sample
None 1--5 6--10 11--15 16+
25%
34%
6%
7%
28%
Expatriates as % of total labor force

16. Frequency meetings with
people from other companies
% sample
Monthly
22%
Weekly
51% Several times
per year
22%
Other
5%
Monthly
23%
Weekly
45%
Several times
per year
20%
Other
11%
In the same
Industry
In other
Industries

17. Purpose of meetings:
% meetings are “very important” and
“important” source of:
Client specific knowledge 76%
Industry specific knowledge 74
Business environment knowledge 69

18. Resource transfer:
NY affiliates/HQs
Most transfers - various kinds of knowledge:
 Professional
 Marketing
 Global market
Knowledge transfer - two ways:
 parents - affiliates
 affiliates - parents
NY affiliates recipients of capital.

19. Profits Transferred to HQs
% sample
None 1--25 26--50 51--75 76+
46%
19%
7%
2%
25%
Profits transferred to HQ as % of total profits

20. Country Breakdown
% totals
2005 1995
Our
sample
Total in
NYC
Western Europe 44% 56% 42%
Asia (Japan) 31 (77) 20 41
Latin America 9 6 3
Southeast Asia 7 3 5
Eastern Europe 5 6 -
Africa 3 6 -

21. Mode of Establishment
Greenfield: 91.5%
 Of which 87% wholly-owned (100%)
Acquisitions: 8.5%
 Of US-owned firm: 7.0%
 Of foreign-owned firm: 1.5%.

22. From NY to the World
NYC
Washington, DC
Miami
Toronto
Chicago
Los Angeles
London
Paris
Tokyo
Hong Kong
Singapore
Sydney
Top Networking
Interests (% rated
Important)
San Francisco
76%
74%
69%
63%

23. Where in the World:
Top city visits
1. Chicago
2. Los Angeles
3. Toronto
4. London
5. Tokyo
6. Paris
7. Hong-Kong
8. Singapore
9. Sidney
10. San Francisco,
Washington DC, Miami

24. Choose NY Again?
2005
 Yes – 90%
 No - 10%
1995
 Yes - 82%
 No - 18%

25. Leave NY – if yes?
2005
 Where to (most
frequently
mentioned): tri-state
area, Chicago,
Washington DC, Los
Angeles
1995
 Where to (most
frequently
mentioned): tri-state
area, elsewhere in
New York State,
Colorado, Arizona
 Why? 57% tax
savings

26. Recommendations for NY
Mayor: Affiliates’ voice
2005 1995
Reduce taxes 45%
Improve transportation/infrastructure 23
Improve security 11
Improve quality of service/business 7
Reduce cost of doing business 7
Improve quality of life 5
Reduce cost of living 3
Improve quality of life 24%
Lower taxes 16
Improve transportation 15
Improve bureaucracy 15
Develop industrial & social policy 12
Develop affordable housing 9
Do PR on safety 4
Improve infrastructure 4

27. From NY to Istanbul
Why do foreign affiliates come to global
centers?
 Learning, knowledge acquisition
 Platform to the world
What do they do/don’t in global centers?
 Customers, suppliers, competitors -
elsewhere
 Local knowledge acquisition – own, HQs
What do they contribute to global centers?
 High value jobs, capital, global links.