WP 2009-5 Financialization and the Dynamics of Offshoring in the U.S
AbstractAnalysis of 35 U.S. manufacturing and service industries over the period 1998-2006 supports aggregate and firm-level studies showing that off-shoring is associated with a higher share of corporate profit in total value added. But these “dynamic” gains from off-shoring have not been realized, because firms have purchased financial assets – especially share buybacks and higher dividend payments – to raise shareholder value, rather than investing in productive assets that raise productivity, growth, employment and income. Despite the corporate sector’s contribution to national savings over the past decade, the off-shoring-financialization linkage reduces the capacity of non-financial corporations to act as a driver of the recovery from the economic crisis that emerged in 2008.
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Bibliographic InfoPaper provided by Schwartz Center for Economic Policy Analysis (SCEPA), The New School in its series SCEPA Working Papers with number 2009-5.
Length: 33 pages
Date of creation: Feb 2009
Date of revision:
offshoring; financialization; profit share;
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- Ian Dew-Becker & Robert J. Gordon, 2005. "Where Did Productivity Growth Go? Inflation Dynamics and the Distribution of Income," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 36(2), pages 67-150.
- Rosemary Batt & Eileen Appelbaum, 2013. "The Impact of Financialization on Management and Employment Outcomes," Upjohn Working Papers and Journal Articles 13-191, W.E. Upjohn Institute for Employment Research.
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