FINANCIAL GLOBALIZATION EFFECTS ON INVESTMENT DECISIONS AND FINANCIALIZATION OF BIG CORPORATIONS

Giovanni Scarano ()

No 255, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: The share of surplus devoted to direct investment in capital goods by big corporations also depends on their corporate savings decisions, which are closely connected not only to the features of corporate governance and the forms of competition, but also to the possibilities of holding liquid financial assets bearing high returns. Financial globalization, multiplying the potential range of financial instruments available to big corporations’ portfolios and creating new ways to access the high profits produced in the emergent markets, can contribute to change the portfolio composition. The paper deals with some contributions that analyse the effects of financial globalization on portfolio management and investment decisions in big corporations, seeking to determine how they may be playing a major role in timing the rhythms of real investment. The main objective is to understand whether these models can account for the tendency to put growing shares of social surplus into speculative channels.

Keywords: Investment theory; Corporate Savings; Capital Movements; Financialisation; Financial Crises (search for similar items in EconPapers)
JEL-codes: B51 E11 E12 E32 F23 G35 (search for similar items in EconPapers)
Pages: 18
Date: 2020-09
New Economics Papers: this item is included in nep-cfn, nep-fdg, nep-hme, nep-int and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:rtr:wpaper:0255

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