Financialisation, financial development, and investment: evidence from European non-financial corporations
Daniele Tori () and
Ozlem Onaran ()
No 22196, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre
This article provides estimations of the effects of different financial channels on physical investment in Europe using the balance sheets of publicly listed non-financial corporations (NFCs) for the period 1995–2015. The evidence suggests that both financial payments and financial income have an adverse effect on investment in fixed assets. The negative impacts of increasing financial income are non-linear with respect to company size: they crowd out investment in large companies, and have a positive effect on the investment of relatively smaller companies. Similar to the recent literature on finance-growth nexus, we find an inverted U-shaped relationship between financial development and companies’ investment. However, in contrast to the existing literature, we also find that a higher degree of financial development in the country is associated with a stronger negative effect of financial income on investment.
Keywords: financialisation; financial development; non-financial corporations; fixed investment; Europe (search for similar items in EconPapers)
JEL-codes: C23 D21 G31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-fdg, nep-hme, nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
http://gala.gre.ac.uk/id/eprint/22196/5/22196%20ON ... _Investment_2018.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://gala.gre.ac.uk/id/eprint/22196/5/22196%20ONARAN_Financialisation_Financial_Development_and_Investment_2018.pdf [302 Moved Temporarily]--> https://gala.gre.ac.uk/id/eprint/22196/5/22196%20ONARAN_Financialisation_Financial_Development_and_Investment_2018.pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:gpe:wpaper:22196
Access Statistics for this paper
More papers in Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre Contact information at EDIRC.
Bibliographic data for series maintained by Nadine Edwards ().