Joel Rabinovich
King's College London, European & International Studies, Faculty Member
- Universidad de Buenos Aires, Facultad de Ciencias Economicas, Faculty MemberUniversité Sorbonne Paris Nord / Sorbonne Paris Nord University, CEPN (Centre d'économie de Paris Nord), Department MemberUniversity of Leeds, Business School, Post-Docadd
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Corporate financialization (CF) comprises a major subfield of financialization studies centered on the belief that significant changes in corporate governance and business models have been driven by financial imperatives, profoundly... more
Corporate financialization (CF) comprises a major subfield of financialization studies centered on the belief that significant changes in corporate governance and business models have been driven by financial imperatives, profoundly impacting investment habits, labor policies, organizational practices, and the distribution of revenues. Experiencing explosive growth in recent years, the field has become mired in conceptual ambiguity, mirroring problems with financialization studies as a whole. While seeking to restore some conceptual clarity and clearly delineate the boundaries of the concept, this paper attempts a comprehensive review of empirical work on CF. At the core of the field we identify four sub-fields, each addressing distinct aspects of the way business models have become financialized under the influence of shareholder value principles. Our dissection of the literature shows, however, that these theories mostly remain under substantiated. The connection of financialization strategies to key outcomes of interest, like declining investment and rising inequality, remains nebulous in most cases. Beyond this, we identify key weaknesses in the way shareholder value orientation-the causal lynch pin of CF accounts-has been theorized. The field as a whole has paid insufficient attention to the variegated and uneven nature of the shareholder revolution, which has prevented a single uniform set of governance principles from diffusing. The critique concludes with a call for caution and nuance in employing the corporate financialization framework, emphasizing its role as just one part of a multifaceted transformation within capitalism. Alongside it, other pivotal structural forces, such as intangibilization, monopolization, and globalization, demand equal attention. The overarching aim of this review is to urge greater clarity, conceptual discipline, and a holistic perspective in future investigations into the dynamics of financialized capitalism.
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The growth in cash holdings by non-financial corporations in emerging economies in general and Latin American in particular has received less attention compared to their peers from advanced economies. Taking into account that cash... more
The growth in cash holdings by non-financial corporations in emerging economies in general and Latin American in particular has received less attention compared to their peers from advanced economies. Taking into account that cash holdings contain not only cash but also short-term, interest-bearing assets, we test whether financial profitability measured by the weight of financial income over total revenues was one motive behind the increase in this type of financial asset as it is claimed in analyses of the financialisation of the firm. We use a panel of nonfinancial firms from Argentina, Brazil, Chile, Colombia, Mexico and Peru to test this hypothesis and find supporting evidence for the Brazilian case only.
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Most empirical macroeconomic research limited to the period since World War II. This paper analyses the effects of changes in income distribution and in private wealth on consumption and investment covering a period from as early as 1855... more
Most empirical macroeconomic research limited to the period since World War II. This paper analyses the effects of changes in income distribution and in private wealth on consumption and investment covering a period from as early as 1855 until 2010 for the UK, France, Germany and USA, based on the dataset of Piketty and Zucman (2014). We contribute to the post-Keynesian debate on the nature of demand regimes, mainstream analyses of wealth effects and the financialisation debate. We find that overall domestic demand has been wage-led in the USA, UK and Germany. Total investment responds positively to higher wage shares, which is driven by residential investment. For corporate investment alone, we find a negative relation. Wealth effects are found to be positive and significant for consumption in the USA and UK, but weaker in France and Germany. Investment is negatively affected by private wealth in the USA and the UK, but positively in France and Germany.
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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... more
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. Résumé: L'une des définitions de la financiarisation d'une société non financière est le fait qu'elle ac-quiert la structure de revenus et d'actifs des sociétés financières. C'est ce que nous appelons l'hypothèse de rentierisation financière. Dans cet article, nous montrons que les données à l'origine de cette hy-pothèse, dans le cas des Etats-Unis, doivent être reconsidérées. Nos résultats constatent que, contraire-ment à l'hypothèse de rentierisation financière, les revenus financiers représentent en moyenne 2,5% des revenus totaux depuis les années 1980, tandis que le profit financier net pèse négativement sur les profits totaux des sociétés non financières. En termes d'actifs, certains des actifs dits financiers sont en réalité issus d'autres activités dans lesquelles les sociétés non financières sont de plus en plus engagées : internationalisation de la production, recentrage sur des activités principales, fusions et acquisitions.
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The financialisation of the nonfinancial corporation has drawn the attention of many scholars who have identified two channels by which financialisation happens: a higher proportion of financial assets compared to nonfinancial ones and a... more
The financialisation of the nonfinancial corporation has drawn the attention of many scholars who have identified two channels by which financialisation happens: a higher proportion of financial assets compared to nonfinancial ones and a higher amount of resources distributed to financial markets. One of the consequences of this is the decrease in investment. Parallel to financialisation, many nonfinancial corporations have also engaged in an internationalization of their productive activities, organizing them under global value chains. Surprisingly, the intersections between the literature on financialisation and the literature on global value chain are still underdeveloped, although, for example, offshoring may also explain the decrease in investment of nonfinancial firms. This paper fills 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 for firms belonging to high offshoring sectors.
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El presente artículo analiza cómo una serie de grupos de capitales argentinos que a fines de la década del ´90 estaban por fuera de las 100 empresas de mayores ventas lograron importantes crecimientos de facturación en un contexto general... more
El presente artículo analiza cómo una serie de grupos de capitales argentinos que a fines de la década del ´90 estaban por fuera de las 100 empresas de mayores ventas lograron importantes crecimientos de facturación en un contexto general signado por la extranjerazación de varios de los grupos de mayor tamaño. Más allá de la alta atención recibida por parte de la prensa no especializada, en especial por la vinculación de parte de estos grupos con el gobierno de turno, desde el ámbito académico no existen trabajos que analicen su crecimiento en forma exhaustiva. El objetivo de este artículo es dar cuenta de este fenómeno, identificando y analizando los vectores de crecimiento de los nuevos grupos.
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The increase in cash holdings held by non-financial corporations in emerging economies in general, and Latin American in particular, has received less attention vis-à-vis their advanced economies’ peers. Considering that cash holdings... more
The increase in cash holdings held by non-financial corporations in emerging economies in general, and Latin American in particular, has received less attention vis-à-vis their advanced economies’ peers. Considering that cash holdings contain not only cash but also short-term, interest-bearing assets, we test whether the pursuit of financial revenues was one motive behind the decision to hold this type of asset as it is claimed in analyses of corporate financialization. We use a panel of listed non-financial firms from Argentina, Brazil, Chile, Mexico, and Peru between 1998 and 2018 to test this hypothesis. Although we find supporting statistical evidence in favor of this relation, this is mostly explained by Brazil and results point towards a low economic significance.
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International audienc
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This thesis studies the different strategies that have allowed listed non-financial corporations to remain profitable while investing less and increasingly distributing funds to shareholders under financialisation. This feeble link... more
This thesis studies the different strategies that have allowed listed non-financial corporations to remain profitable while investing less and increasingly distributing funds to shareholders under financialisation. This feeble link between profitability and investment is usually denominated as the profit-investment puzzle. Part 1 of this thesis locates historically and theoretically this puzzle. Whereas the financialisation literature has generally been limited to show the negative effects of the distribution of funds to share holders for capital expenditures, we show that the coexistence of high levels of profits (and payouts) with low levels of investment was possible due to the simultaneous engagement of these non-financial corporations in other activities. Part 2 examines one type of answer that we denominate the financial turn of accumulation. The solution to the puzzle in this case implies a shift in the activities of NFCs to financial accumulation and profits. However, throug...
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This paper argues that, as far as the investment behavior of non-financial corporations is concerned, the apparent continuity over the last four decades suggested by the financialization label is misleading. Indeed, while the... more
This paper argues that, as far as the investment behavior of non-financial corporations is concerned, the apparent continuity over the last four decades suggested by the financialization label is misleading. Indeed, while the disconnection between profitability and investment is a robust stylized fact for most of the period, with cumulative detrimental consequences for labor, we contend that the underlying mechanisms changed meaningfully at the turn of the millennium. This contribution proposes to establish -empirically and theoretically- two distinctive successive financialization regimes (Mark I and Mark II) and to explain their evolutionary articulation. Financialization Mark I is characterized by the empowerment of financial actors: in a context of high-interest rates and full-blown liberalization, diminishing retained earnings by non-financial corporations resulted in a dramatic slowdown of investment with cascading negative effects for labor. Contrastingly, Financialization Mark II is characterized by a strongly established financial hegemony with new forms of intellectual and financial monopoly. In this configuration, interest rates are low and global value chains are deeply seated. This fuels rampant deflationary pressure, which changes the overall dynamic of the profit-investment nexus. Then, in Financialization Mark II, contrary to what occurred during Financialization Mark I, distributed profits are the consequence of slow investment
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Cette these etudie par quels moyens les societes non financieres cotees ont pu demeurer profitables malgre un investissement en declin et une distribution accrue de leurs fonds aux actionnaires, a l’heure de la financiarisation. Ce faible... more
Cette these etudie par quels moyens les societes non financieres cotees ont pu demeurer profitables malgre un investissement en declin et une distribution accrue de leurs fonds aux actionnaires, a l’heure de la financiarisation. Ce faible lien entre profit et investissement est couramment denomme le probleme du profit sans l’investissement. La premiere partie de la these situe historiquement et theoriquement ce probleme. Alors que la litterature sur la financiarisation se contente de montrer les effets negatifs de la distribution de fonds aux actionnaires sur l’investissement, cette these montre que la coexistence de hauts niveaux de profits (et de paiements financiers) avec de faibles niveaux d’investissement a ete rendu possible par l’engagement simultane des societes non financieres dans d’autres types d’activites.La deuxieme partie examine l’un de ces engagements que l’on denomme le tournant financier de l’accumulation. La solution au probleme du profit sans l’investissement imp...
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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... more
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.
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En un contexto de extranjerización de varias de las empresas de capitales argentinos de mayor facturación, una serie de grupos de capitales locales de menor tamaño relativo, vinculados a la producción o comercialización de electrónica de... more
En un contexto de extranjerización de varias de las empresas de capitales argentinos de mayor facturación, una serie de grupos de capitales locales de menor tamaño relativo, vinculados a la producción o comercialización de electrónica de consumo, obtuvieron altas tasas de crecimiento a partir de 2003. El presente trabajo tiene como objetivo explicar este fenómeno desde el concepto de los “ámbitos privilegiados de acumulación”. Haciendo uso de informes de cámaras empresariales y memorias de los grupos seleccionados, así como también de información macro y mesoeconómica, el artículo delimita las principales características de este ámbito privilegiado de acumulación, ilustra cómo los grupos adaptaron su dinámica productiva y financiera para beneficiarse de él y demuestra el peso decisivo que tiene actualmente para la rentabilidad de estos grupos.
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El presente artículo analiza cómo una serie de grupos de capitales argentinos —que a fines de la década del 90 estaban por fuera de las cien empresas de mayores ventas— lograron importantes crecimientos de facturación a partir del año... more
El presente artículo analiza cómo una serie de grupos de capitales argentinos —que a fines de la década del 90 estaban por fuera de las cien empresas de mayores ventas— lograron importantes crecimientos de facturación a partir del año 2003. Esto resulta llamativo, teniendo en cuenta que el contexto general estuvo signado, durante buena parte del mismo, por la extranjerización de varios de los grupos de mayor tamaño. Más allá de la alta atención recibida por parte de la prensa, en especial por la vinculación de parte de estos grupos con el gobierno de turno, desde el ámbito académico no existen trabajos que analicen su crecimiento en forma exhaustiva. El objetivo de este artículo es dar cuenta de este fenómeno, identificando y analizando los vectores de crecimiento de los nuevos grupos.
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This paper argues that, as far as the investment behavior of non-financial corporations is concerned, the apparent continuity over the last four decades suggested by the corporate financialization label is misleading. Indeed, while the... more
This paper argues that, as far as the investment behavior of non-financial corporations is concerned, the apparent continuity over the last four decades suggested by the corporate financialization label is misleading. Indeed, while the disconnection between profitability and investment is a robust stylized fact for most of the period, with cumulative detrimental consequences for labor, we contend that the underlying mechanisms changed meaningfully at the turn of the millennium. This contribution identifies—empirically and theoretically—two distinct successive corporate financialization regimes (Mark I and Mark II) and explains their evolutionary articulation. Financialization Mark I is characterized by the empowerment of financial actors: in a context of high interest rates and full-blown liberalization, diminishing retained earnings by non-financial corporations resulted in a dramatic slowdown of investment. Contrastingly, Financialization Mark II is characterized by a strongly est...
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Una de las maneras en las que se define a la financiarización de la firma es aquella que postula un mayor involucramiento de las firmas no financieras en la tenencia y compra-venta de activos financieros a partir de los cuales se obtienen... more
Una de las maneras en las que se define a la financiarización de la firma es aquella que postula un mayor involucramiento de las firmas no financieras en la tenencia y compra-venta de activos financieros a partir de los cuales se obtienen mayores intereses y ganancias de capital. asimismo, distintos autores han señalado también que las empresas que operan en países en desarrollo tienen mayores posibilidades de embarcarse en este tipo de actividades mediante operaciones de carry trade y especulación con derivados de tipo de cambio. en este artículo desarrollamos un minucioso análisis de la tenencia de activos e ingresos financieros de firmas que cotizan en bolsa de argentina, Brasil, chile, México y perú, entre 1998 y 2017. si bien vemos un aumento de ciertos activos, nuestra evidencia no permite asegurar que ello se deba a la búsqueda de ganancias financieras.
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The high level of profits along with low levels of gross physical investment has been characterized as a puzzle in heterodox economics. One of the most extended answers at the firm level is that changes in corporate governance have... more
The high level of profits along with low levels of gross physical investment has been characterized as a puzzle in heterodox economics. One of the most extended answers at the firm level is that changes in corporate governance have altered the objectives of the firm toward profits, rather than growth. However, once it is acknowledged that investment becomes the basis upon which companies supply commodities as well as compete with other firms, an ever decreasing rate of investment should not be compatible with permanent high levels of profits. This is what we call the ‘supply-side’ face of the investment-profit puzzle. The article builds on the post-Keynesian theory of the firm and its investment decision and explores different answers already linked to the financialisation literature such as changes brought about by production outsourcing, increased market power, the attack on labor conditions and financial accumulation. Once these solutions are critically assessed, an extension to the theory is proposed in order to show that firm’s profitability has been detaching from its physical investment decisions.
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El presente artículo analiza cómo una serie de grupos de capitales argentinos-que a fines de la década del 90 estaban por fuera de las cien empresas de mayores ventas-lograron importantes crecimientos de facturación a partir del año 2003.... more
El presente artículo analiza cómo una serie de grupos de capitales argentinos-que a fines de la década del 90 estaban por fuera de las cien empresas de mayores ventas-lograron importantes crecimientos de facturación a partir del año 2003. Esto resulta llamativo, teniendo en cuenta que el contexto general estuvo signado, durante buena parte del mismo, por la extranjerización de varios de los grupos de mayor tamaño. Más allá de la alta atención recibida por parte de la prensa, en especial por la vinculación de parte de estos grupos con el gobierno de turno, desde el ámbito académico no existen trabajos que analicen su crecimiento en forma exhaustiva. El objetivo de este artículo es dar cuenta de este fenómeno, identificando y analizando los vectores de crecimiento de los nuevos grupos.
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The financialisation of non-financial 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 non-financial... more
The financialisation of non-financial 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 non-financial 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 non-financial corporations have also engaged in an internationalisation of their productive activities, organising them under global value chains. Though offshoring may also explain the decrease in the level of investment of non-financial 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 US non-financial 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 among firms belonging to sectors prone to offshoring.
chain remain surprisingly underdeveloped. This paper contributes to fill this gap using panel regressions for US non-financial 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 among firms belonging to sectors prone to offshoring.
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One aspect in which non‐financial corporations (NFCs) are said to be financialized is that they have been increasingly engaged in financial accumulation from which they derive a growing proportion of financial income. This is what we call... more
One aspect in which non‐financial corporations (NFCs) are said to be financialized is that they have been increasingly engaged in financial accumulation from which they derive a growing proportion of financial income. This is what we call the financial turn of accumulation hypothesis. In this article, we show that the evidence used to sustain it, in the U.S. setting, has to be reconsidered. Our findings show that, contrary to the financial turn of accumulation hypothesis, financial income averages 2.5% of NFCs’ total income since the 1980s, oscillating since the beginnings of the 1990s until 2005 and then declining. In terms of assets, some of the alleged financial assets might actually reflect other activities in which NFCs have been increasingly engaged, such as tax avoidance, internationalization of production, activities refocusing and M&As.
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En un contexto de extranjerización de varias de las empresas de capitales argentinos de mayor facturación, una serie de grupos de capitales locales de menor tamaño relativo, vinculados a la producción o comercialización de electrónica de... more
En un contexto de extranjerización de varias de las empresas de capitales argentinos de mayor facturación, una serie de grupos de capitales locales de menor tamaño relativo, vinculados a la producción o comercialización de electrónica de consumo, obtuvieron altas tasas de crecimiento a partir de 2003. El presente trabajo tiene como objetivo explicar este fenómeno desde el concepto de los “ámbitos privilegiados de acumulación”. Haciendo uso de informes de cámaras empresariales y memorias de los grupos seleccionados, así como también de información macro y mesoeconómica, el artículo delimita las principales características de este ámbito privilegiado de acumulación, ilustra cómo los grupos adaptaron su dinámica productiva y financiera para beneficiarse de él y demuestra el peso decisivo que tiene actualmente para la rentabilidad de estos grupos.
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Este presente capítulo estudia las estructuras de propiedad de las grandes empresas francesas que cotizan en bolsa. En general, el estudio de la composición de accionistas es crucial para comprender el comportamiento de las compañías en... more
Este presente capítulo estudia las estructuras de propiedad de las grandes empresas francesas que cotizan en bolsa. En general, el estudio de la composición de accionistas es crucial para comprender el comportamiento de las compañías en materia de inversión y empleo. Béguin y Hecquet (2015), por ejemplo, han identificado 222 grandes grupos en Francia con más de 5.000 empleados en los sectores no agrícola y no financiero para 2011. Estos grupos empleaban al 25% de los asalariados de esos sectores y representaban el 31% de las ventas y el 30% del valor agregado. La concentración también era muy alta: la mitad de la capacidad de producción estaba localizada dentro de estos grupos, que también representaban el 45% de las exportaciones. Por lo tanto, se entiende que los cambios en las estructuras de propiedad de un pequeño número de empresas pueden tener consecuencias para sectores enteros de la economía. En este capítulo presentaremos las principales tendencias de la composición accionaria de las sociedades francesas que cotizan en bolsa.
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Este capítulo discute en términos generales cuáles han sido algunas de las condiciones productivas que han permitido la dinámica de baja inversión y alta distribución para las grandes empresas de Estados Unidos. Se comienza por una breve... more
Este capítulo discute en términos generales cuáles han sido algunas de las condiciones productivas que han permitido la dinámica de baja inversión y alta distribución para las grandes empresas de Estados Unidos. Se comienza por una breve descripción de las décadas del ´60 y ´70 en el cual las grandes firmas norteamericanas enfrentaron una serie de “desafíos” cuya resolución forma parte de los cambios que serán analizados. Entre ellos destacamos la refocalización en actividades consideradas como centrales, la deslocalización de tareas de bajo valor agregado y un fuerte proceso de centralización a escala global. Se discute también críticamente aquella tesis que interpreta el aumento de ciertos activos financieros como la transformación de las corporaciones no financieras norteamericanas en rentistas financieros.