Journal Article

Financialisation and capital accumulation in the non-financial corporate sector:

Özgür Orhangazi

in Cambridge Journal of Economics

Published on behalf of Cambridge Political Economy Society

Volume 32, issue 6, pages 863-886
Published in print November 2008 | ISSN: 0309-166X
Published online April 2008 | e-ISSN: 1464-3545 | DOI: https://dx.doi.org/10.1093/cje/ben009
Financialisation and capital accumulation in the non-financial corporate sector:

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  • Macroeconomics: Consumption, Saving, Production, Employment, and Investment
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I discuss the impact of financialisation on real capital accumulation in the US. Using data from a sample of non-financial corporations from 1973 to 2003, I find a negative relationship between real investment and financialisation. Two channels can help explain this negative relationship: first, increased financial investment and increased financial profit opportunities may have crowded out real investment by changing the incentives of firm managers and directing funds away from real investment. Second, increased payments to the financial markets may have impeded real investment by decreasing available internal funds, shortening the planning horizons of the firm management and increasing uncertainty.

Keywords: Financialisation; Capital accumulation; Corporate governance; Investment; Financial markets; E2; D2; G2; G3

Journal Article.  10622 words.  Illustrated.

Subjects: Macroeconomics: Consumption, Saving, Production, Employment, and Investment ; Financial Institutions and Services ; Production and Organizations ; Corporate Governance

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