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Corporate strategy financialized: Conjuncture, arbitrage and earnings capacity in the S&P500

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  • Andersson, Tord
  • Haslam, Colin
  • Lee, Edward
  • Katechos, George
  • Tsitsianis, Nick

Abstract

The conjuncture that ushered in the era of shareholder value served to embed capital market expectations into corporate governance aligning management and shareholder interests. Market arbitrage focussed on modifying contractual relations with stakeholders to extract a (higher) return on invested capital. In this article we focus on cash earnings on capital employed generated by the S&P 500 survivor group of firms covering the period 1990–2008. We use this financial data to construct three complementary perspectives on corporate financial performance: firm, firm-relative and macro. Within this framework the financial numbers and perspectives are analogous to a ‘hall of mirrors’ where ambiguity and contradiction are in play frustrating straightforward performative narratives that connect purpose with financial transformation an era of shareholder value.

Suggested Citation

  • Andersson, Tord & Haslam, Colin & Lee, Edward & Katechos, George & Tsitsianis, Nick, 2010. "Corporate strategy financialized: Conjuncture, arbitrage and earnings capacity in the S&P500," Accounting forum, Elsevier, vol. 34(3), pages 211-221.
    • Handle: RePEc:eee:accfor:v:34:y:2010:i:3:p:211-221
    DOI: 10.1016/j.accfor.2010.08.002
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    Cited by:

    1. Ales Novak, 2014. "Business Model Literature Overview," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2014(1), pages 79-130.
    2. Lee, Edward & Yin, Ya Ping, 2012. "Off-shoring and out-sourcing for shareholder value: Promise versus reality," Accounting forum, Elsevier, vol. 36(1), pages 18-26.
    3. Andersson, Tord & Haslam, Colin, 2012. "The private equity business model: On terra firma or shifting sands?," Accounting forum, Elsevier, vol. 36(1), pages 27-37.
    4. Andersson, Tord & Lee, Edward & Theodosopoulos, Grigorios & Yin, Ya Ping & Haslam, Colin, 2014. "Accounting for the financialized UK and US national business model," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 78-91.
    5. Hatherly, David & Kretzschmar, Gavin, 2011. "Capital and income financialization: Accounting for the 2008 financial crisis," Accounting forum, Elsevier, vol. 35(4), pages 209-216.
    6. Lauwo, Sarah & Otusanya, Olatunde Julius, 2014. "Corporate accountability and human rights disclosures: A case study of Barrick Gold Mine in Tanzania," Accounting forum, Elsevier, vol. 38(2), pages 91-108.

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