Documents financial market 550 results

"In recent decades, financialization has significantly restructured American capitalism. Social scientists have offered several accounts to explain financial markets' ascendance, but this work often portrays financialization as a totalizing force and is conducted within divergent theoretical paradigms—political economy and neo-institutionalism—with few attempts to bridge these differences. Accordingly, we risk talking past each other while failing to identify where financialization occurs. I address these issues with a unique panel data set, panel analysis and with a focus on identifying the meso-level determinants of financialization. I do so with a substantively important industry that exemplifies the global, flexible and competitive characteristics of neoliberal capitalism. I argue that the propensity to financialize rests significantly upon firms' productive roles, meaning we cannot understand financialization without understanding production—global production networks in particular. This is also a call for researchers to explore financialization's multifaceted character and to develop a more analytically rigorous research agenda."

"This article focuses on the impact of the process of financialization on two central labor market institutions, workers' bargaining power and employment protection legislation, in 16 OECD countries from 1970 to 2009. Financialization is described as a finance-led regime of accumulation and as the emergence of a shareholder value maximization strategy. Using various mechanisms at the micro and macro levels, empirical work has investigated the relationship between the type of financial relations and the agents' capacities of maintaining strong encompassing labor market institutions. I argue that the process of financialization will exert strong pressures on labor markets toward more eroded/decentralized bargaining institutions and more flexible employment relations. This article proposes an updated indicator of workers' bargaining power and various measures of financialization. Using panel data models, our main results point out that increased financialization is clearly associated with a reduction in workers' bargaining power and in the strictness of employment protection."

"Financialization requires a regulatory framework that allows markets to emerge and expand. What explains growing political acquiescence to relevant market-enabling rules? The present article identifies feedback processes whereby such rules lock in over time. First, as markets expand, market proponents grow more numerous and develop increasing stakes. Second, potential challengers find it increasingly difficult to mobilize protest, because routinization reduces salience and because market exposure renders protesters more vulnerable. Third, potential challengers lose incentives to protest, because market exposure eliminates some non-market structures that inspire defensive action, and because ‘constrain-thy-neighbor' dynamics encourage the further spread of market-enabling rules as a means of self-defense. The case of market-enabling takeover regulation in Britain since the 1950s illustrates how these processes gradually changed the preferences and resources of bankers, institutional investors, corporate managers and employees and thereby help explain why parliamentary interest in market-restraining counter-measures grew weaker over time."

"Based on the literature on the diversity of capitalism (DoC) and legal origin (LO), this article examines the role of institutional configurations in the uneven development of private equity (PE) in 18 European countries. The article shows that developed stock markets, the ability of limited partners (insurance companies) to invest in LBO funds and low employment protection are more important determinants than investor protection in the case of LBO investments. However, venture capital (VC) investments are found to be positively associated with investor protection but also with developed stock markets and favourable tax rates for managers. R&D tax incentives for investee companies are found to have a negative impact on VC investments, which are nonetheless promoted by public R&D expenditures. Even if national institutional configurations matter in explaining differences, as emphasised by LO and DoC, we observe a common trend in PE development and financialisation."

"In interpreting futures markets, a well-established dichotomy of hedgers and speculators is at play. Hedgers are unwillingly exposed to risks; speculators take them over hoping for profit. This concept ignores the changing notions and practices of ‘speculation' and especially ‘hedging' since the nineteenth century. Originally, hedging meant that merchants ‘buy time' in ongoing transactions. The concept later pointed to securing projected transactions by producers and processors. In today's risk economy, the term can label at best the intent to decrease exposure to a specific market risk, as part of a constant process of readjusting principally ‘speculative' market positions by all market participants. Futures markets ultimately increased the average exposure to risk, but they also made the exposure potentially manageable; this entails that the economic process is increasingly developed by expressing expectations about the future through taking market positions, that is, by creating risk."

"Martin Höpner's paper was written to structure discussions at a workshop of the ‘Complementarity Project', which was held in Paris, 26–27 September 2003. The project was organized by Bruno Amable and Robert Boyer (CEPREMAP, Paris), Colin Crouch (EUI, Florence), Martin Höpner and Wolfgang Streeck (Max Planck Institute for the Study of Societies, Köln). The subject of the workshop was the complementarity, real or imagined, of financial markets and industrial relations in present-day ‘varieties of capitalism'. Apart from the organizers, participants included Patrick Le Gales, Peter Hall, Gregory Jackson, Bruce Kogut, David Marsden and Pascal Petit. In the following we document short excerpts from five out of nine ‘reaction papers' written by participants in advance of the workshop. The selections were made by Wolfgang Streeck."

"The concept of institutional complementarity is central to the recent debate on the internal logics of production regimes, redirecting our attention from the effects of single institutions to interaction effects. The article provides definitions of complementarity, coherence and compatibility and discusses the ways in which different authors describe interaction effects between corporate governance and industrial relations. It turns out that some of the interaction effects are actually direct causal links rather than effects deriving from complementarity. It is argued that complementarity may be caused by both structural similarity and incoherence, and that the concept provides only weak predictions with respect to institutional change. "

"This article presents a simple formal model of institutional complementarity (IC) applied to industrial relations, and develops two important aspects of IC. We first develop a formal definition for the static and dynamic aspects of IC and then relate these to the interaction between financial relations and the outcome of a wage bargaining between firms and trade unions. Trade unions and firms have the choice between a cooperative negotiation targeting at the long-term success of the firm and a conflictual relation targeting at maximizing the current share. One important determinant in this game will be the time horizon financial investors have as they influence the realization of future gains of cooperation between workers and firms. When financial investors are patient, a pareto-superior cooperative equilibrium can be attained. On the other hand, whenever one of the two bargaining parties gets too weak, the viability even of the long-term equilibrium is threatened."

"This paper presents systematic empirical evidence for the financialization of the US economy in the post-1970s period. While numerous researchers have noted the increasing salience of finance, there have been few systematic attempts to consider what this shift means for the nature of the economy, considered broadly. In large part, this omission reflects the considerable methodological difficulties associated with using national economic data to assess the rise of finance as a macro-level phenomenon shaping patterns of accumulation in the US economy. The paper develops two discrete measures of financialization and applies these measures to postwar US economic data in order to determine if, and to what extent, the US economy is becoming financialized. The paper concludes by considering some of the implications of financialization for two areas of ongoing debate in the social sciences: (1) the question of who controls the modern corporation; and (2) the controversy surrounding the extent to which globalization has eroded the autonomy of the state."