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Capital accumulation and corporate portfolio choice between liquidity holdings and financialisation

Giovanni Scarano ()

No 243, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: Most models of investment decisions utilised in macroeconomic models take free or perfect competition as explicit or implicit assumption. However, the oligopolistic structure of most real markets lead to corporate strategic behaviours that can produce very different results. Strategic decisions, connected with agency problems, can play a major role in producing financialisation and timing the rhythms of real investment. The paper deals with both mainstream and heterodox contributions that analyse the effects of corporate governance and strategic behaviours on portfolio management and investment decisions in big corporations, seeking to determine how these effects might play a major role in producing growing liquidity holdings and financialisation. The main objective is to understand whether these models can explain the tendency to place growing shares of social surplus in speculative financial channels, thereby contributing to long-term real stagnation.

Keywords: Investment theory; Interest Rate; Corporate Savings; Financialisation; Financial Crises (search for similar items in EconPapers)
JEL-codes: B51 E11 E12 E32 G35 (search for similar items in EconPapers)
Pages: 20
Date: 2019-01
New Economics Papers: this item is included in nep-cfn, nep-hme, nep-mac and nep-pke
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