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The financialisation–offshoring nexus and the capital accumulation of US non-financial firms

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  • Tristan Auvray
  • Joel Rabinovich

Abstract

The financialisation of non-financial corporations has drawn the attention of many scholars who have identified two main channels through which financialisation occurs: a higher proportion of financial assets compared to non-financial ones and a higher amount of resources diverted to financial markets. A consequence of this process is a decrease in investment. Parallel to financialisation, many non-financial corporations have also engaged in an internationalisation of their productive activities, organising them under global value chains. Though offshoring may also explain the decrease in the level of investment of non-financial firms, the intersections between the literature on financialisation and the literature on global value chain remain surprisingly underdeveloped. This paper contributes to fill this gap using panel regressions for US non-financial corporations between 1995 and 2011. We find evidence that both offshoring and financialisation are determinants to the decrease in investment and that financialisation occurs mainly among firms belonging to sectors prone to offshoring.

Suggested Citation

  • Tristan Auvray & Joel Rabinovich, 2019. "The financialisation–offshoring nexus and the capital accumulation of US non-financial firms," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(5), pages 1183-1218.
    • Handle: RePEc:oup:cambje:v:43:y:2019:i:5:p:1183-1218.
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    File URL: http://hdl.handle.net/10.1093/cje/bey058
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    JEL classification:

    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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