Financialization and its impact on processof deindustrialization in the EU

Tonci Svilokos and Ivan Burin ()
Additional contact information
Ivan Burin: Airport Dubrovnik,Dobrota 24, Mioèiæi, 20213 Èilipi, Croatia

Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, 2017, vol. 35, issue 2, 583-610

Abstract: The aim of this research is to examine whether and to what extent the process of financialization has an impact on the process of deindustrialization in the European Union, employing a fixed-effect panel regression model. In this paper exogenous explanatory variable that indicates the level of financialization is presented by the value added of the finance sector as a percentage of total value added, and by the employment in the finance sector as a percentage of total employment. In a process of deindustrialization, the industrial activity is usually replaced by service activities. However, situations where the service sector has not been able to absorb the additional supply of labour and to produce additional values that would compensate the reduction in the industrial sector, could have led to higher unemployment and lower economic growth. In this paper, deindustrialization is measured by the value added of industry sector as a percentage of total value added, and by the employment in industry as a percentage of total employment. Using latest panel data from EUROSTAT and ILO for the period from 1995 to 2015 author detects the significant and negative impacts of the process of financialization on value added of industry sector, as well as on the employment in the industry sector. This supports the conclusion that the process of deindustrialization of the EU countries can be characterized as a financializationled process.

Keywords: deindustrialization; financialization; value added; unemployment; fixedeffect; panel regression model (search for similar items in EconPapers)
JEL-codes: G01 O14 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.efri.uniri.hr/sites/efri.uniri.hr/file ... 017-2-1513970877.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rfe:zbefri:v:35:y:2017:i:2:p:583-610

Access Statistics for this article

More articles in Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics from University of Rijeka, Faculty of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Danijela Ujcic ().