The Expansion of the Finance Industry and Its Impact on the Economy: A Territorial Approach Based on Swiss Pension Funds
A new economic geography of finance is emerging, and the current "financialization" of contemporary economies has contributed greatly to the reshaping of the economic landscape. How can these changes be understood and interpreted, especially from a territorial point of view? There are two contradictory economic theories regarding the tangible effects of the rise of the finance industry. According to neoclassical financial theorists, the finance industry's success is based on its positive effects on the real economy through its capacity to allocate financial resources efficiently. An alternative approach, adopted here, posits that finance does not merely mirror the real economy and that the financial economy, far from being a simple instrument for the allocation of capital, has its own autonomy, its own logic of development and expansion. A series of complex, and sometimes contradictory, connections link financial markets and the real economy, and there are some tensions between them, calling into question the coherence of the regional and national economies that follow from them. Moreover, the territorial approach shows how the mobility/liquidity of capital and the changing dimensions of new regions and countries are central to the finance industry's functioning. This article builds an understanding of the financial system through the lens of pension funds and highlights the impact of such a system on the real economy and its geography.
|Date of creation:||Jul 2009|
|Publication status:||Published in Economic Geography, July 2009, Volume 85, Issue 4, Pages 313-334|
|Contact details of provider:|| Postal: Faubourg de l'Hôpital 27, 2000 Neuchâtel, Switzerland|
Phone: +41 (0)32 718 1420
Fax: +41 (0)32 718 1421
Web page: http://www2.unine.ch/socio/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jane S. Pollard, 2003. "Small firm finance and economic geography," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 429-452, October.
When requesting a correction, please mention this item's handle: RePEc:nct:wpaper:07-09. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain Paul Segessemann)
If references are entirely missing, you can add them using this form.