Accounting for the financialized UK and US national business model

Tord Andersson, Edward Lee, Grigorios Theodosopoulos, Ya Ping Yin and Colin Haslam

CRITICAL PERSPECTIVES ON ACCOUNTING, 2014, vol. 25, issue 1, 78-91

Abstract: In this paper we adopt a ‘business model’ conceptual framework grounded in accounting to describe the processes and mechanisms of national economic development and transformation. We locate national business models within a broad econo-sphere where they evolve and adapt to information arising out of stakeholder/institutional interactions. These interactions congeal into reported financial numbers that are presented as current income flows (income, expenditure), balance sheet accumulations and changes in net worth (assets and liabilities outstanding). We employ financial data from national accounts to specifically describe how the US and UK national business models have become financialized as ongoing capitalizations run ahead of earnings capacity. This process of interminable re-capitalization is conditioned by variable institutional and sub-institutional sector characteristics. However, in financialized national business models the system of accounting takes on added analytical significance because it ‘transmits rather than contains’ and ‘amplifies rather than dampens’ adverse financial disturbance as capitalizations are recalibrated up or down in secondary markets.

Keywords: Critique; Intérêt public; Crítica; Interés Público; Critical; Public interest; Financialization; National business models; Capitalization; Financial disturbance (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:crpeac:v:25:y:2014:i:1:p:78-91

DOI: 10.1016/j.cpa.2012.10.006

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