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The financialisation of the nonfinancial corporation. A critique to the financial rentieralization hypothesis

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  • Joel Rabinovich

    () (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)

Abstract

One aspect in which nonfinancial corporations are said to be financialised is that they emulate the asset and income structure of financial corporations. This is what we call the financial rentieralization hypothesis. In this article we show that the evidence used to sustain it, in the US setting, has to be reconsidered. Our findings show that, contrary to the financial rentieralization hypothesis, financial income averages 2.5% of total income since the '80s while net financial profit gets more negative as percentage of total profit for nonfinancial corporations. In terms of assets, some of the alleged financial assets actually reflect other activities in which nonfinancial corporations have been increasingly engaging: internationalization of production, activities refocusing and M&As.

Suggested Citation

  • Joel Rabinovich, 2018. "The financialisation of the nonfinancial corporation. A critique to the financial rentieralization hypothesis," CEPN Working Papers hal-01691435, HAL.
  • Handle: RePEc:hal:cepnwp:hal-01691435
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01691435
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    More about this item

    Keywords

    financialisation of the non-financial corporation; firm strategy; corporate governance; USA; Mots clés: financiarisation des entreprises non financières; stratégie des firmes; gouvernement d'entreprise; États-Unis;

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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