Shareholder value orientation, distribution and growth – short- and medium-run effects in a Kaleckian model

Eckhard Hein

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: We discuss the effects of rising shareholder power on distribution and capital accumulation in a Kaleckian model. Increasing shareholder power is associated with decreasing managements’ animal spirits, on the one hand, and increasing dividends distributed to shareholders, on the other hand. In the short run, increasing shareholder power may either have positive (‘finance-led’), negative (‘normal’) or intermediate (‘profits without investment’) effects on capacity utilisation, profits and capital accumulation. In the medium run, the positive (‘finance-led’) effects may be maintained in a stable environment under very special conditions, whereas the negative (‘normal’) and the intermediate (‘profits without investment’) effects turn into cumulative disequilibrium processes with falling rates of capacity utilisation, profits and capital accumulation and rising debt- and rentiers’ equity-capital-ratios.

JEL-codes: E12 E21 E22 E25 E44 (search for similar items in EconPapers)
Date: 2008-03
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Related works:
Journal Article: SHAREHOLDER VALUE ORIENTATION, DISTRIBUTION AND GROWTH—SHORT‐ AND MEDIUM‐RUN EFFECTS IN A KALECKIAN MODEL (2010)
Working Paper: Shareholder value orientation, distribution and growth - short- and medium-run effects in a Kaleckian model (2008)
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