TY - JOUR
T1 - Dimensions and Determinants of Financialisation
T2 - Comparing OECD Countries since 1997
AU - Karwowski, Ewa
AU - Shabani, Mimoza
AU - Stockhammer, Engelbert Richard
PY - 2019
Y1 - 2019
N2 - The financialisation literature has grown over the past decades. Despite a generally accepted definition, financialisation has been used to describe different phenomena. We distinguish between financialisation of non-financial companies, households and the financial sector and use activity and vulnerability measures. We identify seven financialisation hypotheses in the literature and empirically investigate them in a cross-country analysis for 17 OECD countries and two time periods, 1997–2007 as well as 2008–17. We find different financialisation measures are only weakly correlated, suggesting the existence of distinct financialisation processes. There is strong evidence that financialisation is linked to asset price inflation and correlated with a debt-driven demand regime. Financial deregulation encourages financialisation. There is limited evidence that market-based financial systems are more financialised. Foreign financial inflows do not seem a main driver. We do not find indication that an investment slowdown precedes financialisation. Our findings suggest financialisation should be understood as a variegated process, playing out differently across economic sectors and countries.
AB - The financialisation literature has grown over the past decades. Despite a generally accepted definition, financialisation has been used to describe different phenomena. We distinguish between financialisation of non-financial companies, households and the financial sector and use activity and vulnerability measures. We identify seven financialisation hypotheses in the literature and empirically investigate them in a cross-country analysis for 17 OECD countries and two time periods, 1997–2007 as well as 2008–17. We find different financialisation measures are only weakly correlated, suggesting the existence of distinct financialisation processes. There is strong evidence that financialisation is linked to asset price inflation and correlated with a debt-driven demand regime. Financial deregulation encourages financialisation. There is limited evidence that market-based financial systems are more financialised. Foreign financial inflows do not seem a main driver. We do not find indication that an investment slowdown precedes financialisation. Our findings suggest financialisation should be understood as a variegated process, playing out differently across economic sectors and countries.
KW - Financialisation
KW - cross country analysis
KW - financial deregulation
KW - property prices
UR - http://www.scopus.com/inward/record.url?scp=85074034083&partnerID=8YFLogxK
U2 - 10.1080/13563467.2019.1664446
DO - 10.1080/13563467.2019.1664446
M3 - Article
SN - 1356-3467
JO - NEW POLITICAL ECONOMY
JF - NEW POLITICAL ECONOMY
ER -