Financialisation in Emerging Economies: A Systematic Overview and Comparison with Anglo-Saxon Economies

Ewa Karwowski and Engelbert Stockhammer

No 2016-11, Economics Discussion Papers from School of Economics, Kingston University London

Abstract: Financialisation research has originally focussed on the US experience, but the concept is now increasingly applied to emerging economies (EMEs). There is a rich literature stressing peculiarities of individual country experiences, but little systematic comparison across EMEs. This paper fills this gap, providing an overview of the debate and identifying six financialisation interpretations for EMEs. These different interpretations stress (1) financial deregulation (2) foreign financial inflows, (3) asset price volatility, (4) the shift from bank-based to market-based finance, (5) business debt, and (6) household indebtedness. We construct and compare measures of the six financialisation interpretations across a sample of 17 EMEs from Latin America, emerging Europe, Africa and Asia, contrasting them with the US and UK, two financialised economies. We find considerable variation in financialisation experiences of EMEs. Asset price volatility is found across continents. Asia has been more exposed to capital inflows, stock markets have gained importance and private sector debt risen. In emerging Europe financial deregulation has been more pronounced with lower levels but strong increases in household debt. The picture is similar in South Africa, the African EME in the sample, where household debt is comparatively high. Financialisation in Latin America is weaker according to our measures.

Keywords: financialisation; emerging markets; financial instability; asset price volatility; heterodox economics (search for similar items in EconPapers)
JEL-codes: B50 F30 F34 G01 G12 G15 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-08-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies (2017)
Working Paper: Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kngedp:2016_011

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