Ciência-IUL
Publicações
Descrição Detalhada da Publicação
Título Revista
Review of Political Economy
Ano (publicação definitiva)
2017
Língua
Inglês
País
Reino Unido
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Abstract/Resumo
This article presents an empirical analysis of the relationship between financialisation and real investment for non-financial corporations using panel data composed of 27 European Union countries over 19 years (1995 to 2013). On the one hand, financialisation leads to a rise in financial investments, diverting funds from real investments (‘crowding out’ effect); on the other, pressures from shareholders to intensify financial payments restrict the funds available for new real investments. We estimate an aggregate investment equation with the traditional variables (lagged investment, profitability, debt, cost of capital, corporate savings and output growth) and two further measures of financialisation (financial receipts and financial payments). The findings demonstrate that financialisation has damaged real investment in European Union countries, mainly through the channel of financial payments, either by interest or dividend payments. It is also found that the prejudicial effects of financialisation on investment were more severe in the pre-2007 crisis period. It is concluded that financialisation contributed to a slowdown of real investment by 1 to 8 per cent in the full and pre-crisis period, respectively. During the pre-crisis period, financialisation was the main driver of the slowdown of investment in the European Union.
Agradecimentos/Acknowledgements
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Palavras-chave
Financialisation,Investment,European Union,Panel data,Least squares dummy variable bias corrected estimator
Classificação Fields of Science and Technology
- Economia e Gestão - Ciências Sociais
- Ciências Políticas - Ciências Sociais
Registos de financiamentos
Referência de financiamento | Entidade Financiadora |
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UID/SOC/03127/2013 | Fundação para a Ciência e a Tecnologia |