IDEAS home Printed from https://ideas.repec.org/a/eee/crpeac/v25y2014i1p78-91.html
   My bibliography  Save this article

Accounting for the financialized UK and US national business model

Author

Listed:
  • Andersson, Tord
  • Lee, Edward
  • Theodosopoulos, Grigorios
  • Yin, Ya Ping
  • Haslam, Colin

Abstract

In this paper we adopt a ‘business model’ conceptual framework grounded in accounting to describe the processes and mechanisms of national economic development and transformation. We locate national business models within a broad econo-sphere where they evolve and adapt to information arising out of stakeholder/institutional interactions. These interactions congeal into reported financial numbers that are presented as current income flows (income, expenditure), balance sheet accumulations and changes in net worth (assets and liabilities outstanding). We employ financial data from national accounts to specifically describe how the US and UK national business models have become financialized as ongoing capitalizations run ahead of earnings capacity. This process of interminable re-capitalization is conditioned by variable institutional and sub-institutional sector characteristics. However, in financialized national business models the system of accounting takes on added analytical significance because it ‘transmits rather than contains’ and ‘amplifies rather than dampens’ adverse financial disturbance as capitalizations are recalibrated up or down in secondary markets.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:crpeac:v:25:y:2014:i:1:p:78-91
    DOI: 10.1016/j.cpa.2012.10.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S104523541200130X
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.cpa.2012.10.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eliot Heilpern & Colin Haslam & Tord Andersson, 2009. "When it comes to the crunch: What are the drivers of the US banking crisis?," Accounting Forum, Taylor & Francis Journals, vol. 33(2), pages 99-113, June.
    2. repec:dgr:rugsom:09002 is not listed on IDEAS
    3. Erturk, Ismail & Froud, Julie & Johal, Sukhdev & Leaver, Adam & Williams, Karel, 2012. "Accounting for national success and failure: Rethinking the UK case," Accounting forum, Elsevier, vol. 36(1), pages 5-17.
    4. Shin, Hyun Song, 2008. "Risk and liquidity in a system context," Journal of Financial Intermediation, Elsevier, vol. 17(3), pages 315-329, July.
    5. 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.
    6. Robert Eisner, 1980. "Capital Gains and Income: Real Changes in the Value of Capital in the United States, 1946-77," NBER Chapters, in: The Measurement of Capital, pages 175-346, National Bureau of Economic Research, Inc.
    7. Tord Andersson & Colin Haslam, 2012. "The private equity business model: On terra firma or shifting sands?," Accounting Forum, Taylor & Francis Journals, vol. 36(1), pages 27-37, March.
    8. Nancy Ruggles & Richard Ruggles, 1973. "A Proposal for a System of Economic and Social Accounts," NBER Chapters, in: The Measurement of Economic and Social Performance, pages 111-160, National Bureau of Economic Research, Inc.
    9. Ismail Erturk & Julie Froud & Sukhdev Johal & Adam Leaver & Karel Williams, 2012. "Accounting for national success and failure: Rethinking the UK case," Accounting Forum, Taylor & Francis Journals, vol. 36(1), pages 5-17, March.
    10. Heilpern, Eliot & Haslam, Colin & Andersson, Tord, 2009. "When it comes to the crunch: What are the drivers of the US banking crisis?," Accounting forum, Elsevier, vol. 33(2), pages 99-113.
    11. Bezemer, D.J., 2009. "No one saw this coming. Understanding financial crisis through accounting models," Research Report 09002, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    12. Bezemer, Dirk J, 2009. "“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models," MPRA Paper 15892, University Library of Munich, Germany.
    13. Usher, Dan (ed.), 1980. "The Measurement of Capital," National Bureau of Economic Research Books, University of Chicago Press, number 9780226843001, August.
    14. R. Edward Freeman & Andrew C. Wicks & Bidhan Parmar, 2004. "Stakeholder Theory and “The Corporate Objective Revisited”," Organization Science, INFORMS, vol. 15(3), pages 364-369, June.
    15. Tord Andersson & Colin Haslam & Edward Lee & George Katechos & Nick Tsitsianis, 2010. "Corporate strategy financialized: Conjuncture, arbitrage and earnings capacity in the S&P500," Accounting Forum, Taylor & Francis Journals, vol. 34(3-4), pages 211-221, September.
    16. Hyman P. Minsky, 1992. "The Financial Instability Hypothesis," Economics Working Paper Archive wp_74, Levy Economics Institute.
    17. Shin, Hyun Song, 2010. "Risk and Liquidity," OUP Catalogue, Oxford University Press, number 9780199546367, Decembrie.
    18. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Palea, Vera, 2019. "Accounting for Sustainable Finance: Does Fair value Accounting Fit for Long-term Investing in Equity?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201912, University of Turin.
    2. Smyth, Stewart & Cole, Ian & Fields, Desiree, 2020. "From gatekeepers to gateway constructors: Credit rating agencies and the financialisation of housing associations," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 71(C).
    3. Lakshmi, Geeta, 2018. "Gekko and black swans: Finance theory in UK undergraduate curricula," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 52(C), pages 35-47.
    4. Haslam Colin & Tsitsianis Nick & Hoinaru Razvan & Andersson Tord & Katechos George, 2016. "Stress Testing International Financial Reporting Standards (IFRS): Accounting for Stability and the Public Good in a Financialized World," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 6(2), pages 93-118, July.
    5. Palea, Vera & Biancone, Paolo Pietro, 2017. "Which Accounting Rules for Economic and Social Sustainable Development? Engaging Critically with IFRS Adoption in the EU," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201733, University of Turin.
    6. Kinsella, Stephen, 2019. "Visualising economic crises using accounting models," Accounting, Organizations and Society, Elsevier, vol. 75(C), pages 1-16.
    7. Palea, Vera, 2018. "Financial reporting for sustainable development: Critical insights into IFRS implementation in the European Union," Accounting forum, Elsevier, vol. 42(3), pages 248-260.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Beisland, Leif Atle, 2014. "Equity valuation in practice: The influence of net financial expenses," Accounting forum, Elsevier, vol. 38(2), pages 122-131.
    2. Hatherly, David & Kretzschmar, Gavin, 2011. "Capital and income financialization: Accounting for the 2008 financial crisis," Accounting forum, Elsevier, vol. 35(4), pages 209-216.
    3. Haslam, Colin & Tsitsianis, Nick & Theodosopoulos, Grigorios & Lee, Edward, 2018. "Accounting for voluntary hospices in England: A business model perspective," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 54(C), pages 27-40.
    4. Ebrahim, M. Shahid & Jaafar, Aziz & Omar, Fatma A. & Salleh, Murizah Osman, 2016. "Can Islamic injunctions indemnify the structural flaws of securitized debt?," Journal of Corporate Finance, Elsevier, vol. 37(C), pages 271-286.
    5. Gunther Tichy, 2020. "Zur Prognostizierbarkeit von Krisen," WIFO Monatsberichte (monthly reports), WIFO, vol. 93(3), pages 193-206, March.
    6. Thomas Piketty & Gabriel Zucman, 2014. "Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1255-1310.
    7. William Kingston, 2014. "Schumpeter and the end of Western Capitalism," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 449-477, July.
    8. Buiter, Willem, 2014. "Central Banks: Powerful, Political and Unaccountable?," CEPR Discussion Papers 10223, C.E.P.R. Discussion Papers.
    9. Yamamoto, Shugo, 2020. "Banking Network Multiplier effects on cross-border bank inflows," International Review of Economics & Finance, Elsevier, vol. 70(C), pages 493-507.
    10. Nathan Perry & Nathaniel Cline, 2016. "What caused the great inflation moderation in the US? A post-Keynesian view," Review of Keynesian Economics, Edward Elgar Publishing, vol. 4(4), pages 475-502, October.
    11. Bengtsson, Erik & Waldenström, Daniel, 2018. "Capital Shares and Income Inequality: Evidence from the Long Run," The Journal of Economic History, Cambridge University Press, vol. 78(3), pages 712-743, September.
    12. Thorvald Grung Moe, 2012. "Shadow Banking and the Limits of Central Bank Liquidity Support: How to Achieve a Better Balance between Global and Official Liquidity," Economics Working Paper Archive wp_712, Levy Economics Institute.
    13. Berg, Matthew & Hartley, Brian & Richters, Oliver, 2015. "A stock-flow consistent input–output model with applications to energy price shocks, interest rates, and heat emissions," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 17(1).
    14. Aymanns, Christoph & Caccioli, Fabio & Farmer, J. Doyne & Tan, Vincent W.C., 2016. "Taming the Basel leverage cycle," Journal of Financial Stability, Elsevier, vol. 27(C), pages 263-277.
    15. Emanuela Ghignoni, 2016. "The ?great escape? from Italian Universities: Do labour market recruitment channels matter?," QUADERNI DI ECONOMIA DEL LAVORO, FrancoAngeli Editore, vol. 2016(106), pages 49-75.
    16. Srinivas Yanamandra, 2014. "Minsky, Monetary Policy, and Mint Street: Challenges for the Art of Monetary Policymaking in Emerging Economies," Economics Working Paper Archive wp_820, Levy Economics Institute.
    17. Thomas L. Hungerford, 2020. "The Course of Income Inequality as a Cohort Ages into Old-Age," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 71-90, March.
    18. Robert Rowthorn, 2019. "Keynesian Economics - Back from the Dead? The Godley-Tobin Lecture," Working Papers wp512, Centre for Business Research, University of Cambridge.
    19. Kakarot-Handtke, Egmont, 2012. "The common error of common sense: an essential rectification of the accounting approach," MPRA Paper 43196, University Library of Munich, Germany.
    20. Effrosyni Adamopoulou & Giulia Martina Tanzi, 2017. "Academic Drop-Out and the Great Recession," Journal of Human Capital, University of Chicago Press, vol. 11(1), pages 35-71.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:crpeac:v:25:y:2014:i:1:p:78-91. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/critical-perspectives-on-accounting/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.