The takeover of Prague's banking cluster by multinational groups from an evolutionary perspective

Abstract

This article identifies the main drivers in the evolution of the banking cluster in Prague over the last two centuries. Conceptually, it employs the adaptive-cycle model of cluster evolution, which acknowledges the role of external factors in cluster evolution. An empirical analysis shows that the evolution of the banking cluster in Prague has been primarily driven by several episodes of major external disruptions. A particular attention is paid to the latest phase of cluster evolution, which started around the beginning of the 21st century when Prague’s banks were taken over by foreign multinational groups. We argue that, despite the numerous costs and risks associated with this “subsidiarisation” of the banking cluster in Prague, there were benefits, some of which were surprisingly manifested during the 2008-2009 global economic crisis.