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

Author

Listed:
  • Tristan Auvray

    (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)

  • 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

The financialisation of nonfinancial 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 nonfinancial 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 nonfinancial corporations have also engaged in an internationalisation of their productive activities, organizing them under global value chains. Though offshoring may also explain the decrease in the level of investment of nonfinancial 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 U.S. nonfinancial 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 amongst 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," Post-Print hal-02064453, HAL.
    • Handle: RePEc:hal:journl:hal-02064453
    DOI: 10.1093/cje/bey058
    Note: View the original document on HAL open archive server: https://hal.science/hal-02064453v1
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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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