Did the ‘Real’ Economy Turn Financial? Mapping the Contours of Financialisation in the Non-Financial Corporate Sector

Matthew Soener

New Political Economy, 2021, vol. 26, issue 5, 817-831

Abstract: The ‘financialisation’ of the economy is considered a key phenomenon of our time, but we lack large-scale empirical evidence of it. Has financialisation in the non-financial corporate sector really taken off in recent decades? To answer this question, I marshal data on all available publicly traded corporations in the largest 37 countries from 1991 to 2017. While there has been a decline in ‘real’ capital accumulation, I do not find firms are substituting tangible for financial investment. Financial income and financial asset shares have declined over time. Only by one measure – shareholder payouts – is there significant growth. To the extent we do see financialisation behaviour, it is overwhelmingly accounted for by very large and internationalised firms. In light of these findings, I argue that non-financial sector financialisation is connected to changes in the global production process which allows a small number of powerful firms to recycle surplus profits into financial capital.

Date: 2021
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DOI: 10.1080/13563467.2020.1858775

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