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The labour share and financialisation: Evidence from publicly listed firms

Alexander Guschanski () and Ozlem Onaran ()

No 19371, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: This paper provides international evidence for the effect of financialisation on the labour share at the firm level. We test different hypotheses about the impact of financialisation on functional income distribution, while also controlling for the effect of technological change, market concentration, labour market institutions and globalisation. We use panel data for publicly listed non-financial companies globally and with a particular focus on the EU15 for the period of 1995-2016. We find a negative effect of financialisation on the labour share due to increased shareholder value orientation in all countries, while there is also evidence of a negative effect due to an increase in mark-ups in France and the UK. Additionally, our findings cast doubt on the hypotheses that the decline in the labour share in European publicly listed firms is due to technological change. Similarly, market concentration did not play an important role for the decline in the labour share. In contrast, we find that concentration has declined among publicly listed firms in Europe, and that concentration is not associated with declining labour shares.

Keywords: labour share; income distribution; financialisation; market concentration; technology (search for similar items in EconPapers)
JEL-codes: J3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-eec, nep-hme, nep-lma and nep-pke
Date: 2018-03-05
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Citations: View citations in EconPapers (3) Track citations by RSS feed

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