Financial regimes, financialization patterns and industrial performances: preliminary remarks

Giovanni Dosi, Valerie Revest and Sandro Sapio ()

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: The evolutionary taxonomy of financial systems, outlined by Dosi (1990), argued that market-based systems would be comparatively more engaged in the exploration of new technological paradigms, as an outcome of market selective pressure, whereas the more institutionalized finance allocation in credit-based systems would give them an advantage in cumulative learning. This article offers a preliminary assessment of those conjectures in light of the institutional change associated with the financialization process and the "maximizing shareholders value" principle. The available evidence suggests that financialization has de-linked the performance of firms on the financial markets from the determinants of firm-level growth and innovation. Selection among companies increasingly occurs on financial markets, along criteria of short-term returns. As such, financialization has contributed to compress and somewhat degrade the specific properties of the finance-innovation nexus of both financial system archetypes, deteriorating both static and Schumpeterian efficiency.

Keywords: Evolutionary Theory; Financial Systems; Firm growth; Innovation; Financialization (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-bec, nep-hme, nep-ino, nep-pke and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Financial regimes, financialization patterns and industrial performances: preliminary remarks (2016)
Working Paper: Financial regimes, financialization patterns and industrial performances: preliminary remarks (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2016/25

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