An interwoven financialization narrative as a driver of the 2008 Crash

Jonathan Myers

Qualitative Research in Financial Markets, 2022, vol. 14, issue 5, 697-767

Abstract: Purpose - The 2008 Crash (the Crash) has been attributed to the dominance of financialized corporate governance, particularly an increased shareholder value rhetoric. Following the Crash, this extreme narrative is understood to have become less financialized through increasingly favouring stakeholders. The purpose of this research is to investigate this often-accepted view using field theory, wherein managers' biases in the value-creating process result from an interconnected, dynamic, multi-actor discourse. Design/methodology/approach - Various domains across the UK’s corporate governance environment, from the perspective of field theory, generate the complex discourse: corporate and regulatory domains, stakeholder organizations such as the press and think tanks. Domain-specific corpora, representative of this multi-actor field, were constructed, with financialization analysed by assessing managers’ altering biases concerning the relative importance of shareholders and stakeholders (amongst other factors like time horizon) to value creation. Findings - Highlights of the multiple findings include the following: corporate narrative about value creation became less financialized following the Crash, yet favouring shareholders, while the multi-actor discourse for the UK economy as a whole became slightly more financialized. Originality/value - Analysing a multi-actor discourse is complex. And this, to the best of the author’s knowledge, is the first study of its kind, and only made possible with the original methodology of narrative staining. The approach, while having particular relevance to field theory, is applicable to many other narrative-based research scenarios.

Keywords: Managerial bias; Field theory; Financialization; Global financial crisis; Narrative staining; Shareholder primacy; Stakeholder model; Termism; Urgency; Value creation (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:qrfmpp:qrfm-04-2021-0060

DOI: 10.1108/QRFM-04-2021-0060

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