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Corporate financialisation in South Africa: From investment strike to housing bubble

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  • Karwowski, Ewa

    (Kingston University London)

Abstract

This article reveals the processes of financialisation in the South African economy by tracing the sources and destinations of NFCs’ liquidity. The paper argues that rather than the volume of NFCs’ financial investment, the composition of financial assets is crucial to assess corporate financialisation in the country. Non-financial businesses in South Africa fundamentally transformed theur investment behaviour during the 1990s, shifting from more productive uses such as trade credit towards highly liquid and potentially innovative (and therefore risky) financial investment. Following the direction of financial flows the article shows that – fuelled by foreign capital inflows – companies’ financial operations contributed to the price inflation in South African property markets.

Suggested Citation

  • Karwowski, Ewa, 2017. "Corporate financialisation in South Africa: From investment strike to housing bubble," Economics Discussion Papers 2017-7, School of Economics, Kingston University London.
    • Handle: RePEc:ris:kngedp:2017_007
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    Cited by:

    1. Costas Lapavitsas & Aylin Soydan, 2020. "Financialisation in developing countries: Approaches, concepts, and metrics," Working Papers 240, Department of Economics, SOAS University of London, UK.

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    More about this item

    Keywords

    financialisation; emerging markets; financial instability; asset price volatility; heterodox economics;
    All these keywords.

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • F30 - International Economics - - International Finance - - - General
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G01 - Financial Economics - - General - - - Financial Crises
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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