Financialisation and capital accumulation in the non-financial corporate sector:
AbstractI discuss the impact of financialisation on real capital accumulation in the US. Using data from a sample of non-financial corporations from 1973 to 2003, I find a negative relationship between real investment and financialisation. Two channels can help explain this negative relationship: first, increased financial investment and increased financial profit opportunities may have crowded out real investment by changing the incentives of firm managers and directing funds away from real investment. Second, increased payments to the financial markets may have impeded real investment by decreasing available internal funds, shortening the planning horizons of the firm management and increasing uncertainty. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Cambridge Journal of Economics.
Volume (Year): 32 (2008)
Issue (Month): 6 (November)
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Other versions of this item:
- Özgür Orhangazi, 2007. "Financialization and Capital Accumulation in the Non-Financial Corporate Sector," Working Papers wp149, Political Economy Research Institute, University of Massachusetts at Amherst.
- E2 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment
- D2 - Microeconomics - - Production and Organizations
- G2 - Financial Economics - - Financial Institutions and Services
- G3 - Financial Economics - - Corporate Finance and Governance
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