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The financialisation of the nonfinancial corporation. A critique to the financial rentieralization hypothesis

Joel Rabinovich ()

No 2017-22, CEPN Working Papers from Centre d'Economie de l'Université de Paris Nord

Abstract: One aspect in which nonfinancial corporations are said to be financialised is that they emulate the asset and income structure of financial corporations. This is what we call the financial rentieralization hypothesis. In this article we show that the evidence used to sustain it, in the US setting, has to be reconsidered. Our findings show that, contrary to the financial rentieralization hypothesis, financial income averages 2.5% of total income since the ‘80s while net financial profit gets more negative as percentage of total profit for nonfinancial corporations. In terms of assets, some of the alleged financial assets actually reflect other activities in which nonfinancial corporations have been increasingly engaging: internationalization of production, activities refocusing and M&As.

Keywords: financialisation of the non-financial corporation; firm strategy; corporate governance; USA (search for similar items in EconPapers)
JEL-codes: G3 L2 F23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hme
Date: 2017-12
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Working Paper: The financialisation of the nonfinancial corporation. A critique to the financial rentieralization hypothesis (2018) Downloads
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