IDEAS home Printed from https://ideas.repec.org/p/osf/socarx/asx7t.html
   My bibliography  Save this paper

Global Finance: changing practices, actors, and geographies

Author

Listed:
  • Fichtner, Jan

    (University of Amsterdam)

  • Petry, Johannes

Abstract

Global finance can be seen as a complex international network of portfolio investments, loans and financial transactions shaped by various private but also by public actors. The vast profit-seeking activities of private financial actors influence capital flows, market stability, and the allocation of financial resources have an impact on corporations, markets, and governments worldwide. In other words, global finance is not a ‘neutral’ tool for price-discovery or a ‘pass-through’ segment that merely provides capital to its most efficient use in the real economy – global finance is much more than that, it is about (re)shaping politico-economic power relations in the contemporary international political economy. Before the global financial crisis of 2007-2008, private commercial and investment banks arguably constituted the core of global finance and exerted an outsized influence. However, the crisis initiated a shift in the power distribution and actors’ constellations within global finance. This new era was arguably marked by a relative decline of big banking groups – and the concomitant rise of large asset management firms (e.g., BlackRock) and other emerging influential actors such as index providers (e.g., MSCI). In parallel, the traditional center of gravity of global finance, which revolved around the axis between New York and London, was complemented and also partly challenged by the ascent of new actors such as sovereign wealth funds and financial markets from the Global South, above all China. These new actors often follow a somewhat different logic than the frequently short-term oriented and primarily profit-driven financial market actors from the Anglo-American core, since they are often permeated by government interests and consequently aimed at incorporating long-term strategic goals.

Suggested Citation

  • Fichtner, Jan & Petry, Johannes, 2024. "Global Finance: changing practices, actors, and geographies," SocArXiv asx7t, Center for Open Science.
  • Handle: RePEc:osf:socarx:asx7t
    DOI: 10.31219/osf.io/asx7t
    as

    Download full text from publisher

    File URL: https://osf.io/download/66f125debc6f4eec4c29e1fe/
    Download Restriction: no

    File URL: https://libkey.io/10.31219/osf.io/asx7t?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
    ---><---

    References listed on IDEAS

    as
    1. Cormier, Benjamin & Naqvi, Natalya, 2023. "Delegating discipline: how indexes restructured the political economy of sovereign bond markets," LSE Research Online Documents on Economics 117248, London School of Economics and Political Science, LSE Library.
    2. Pape, Fabian & Petry, Johannes, 2023. "East Asia and the politics of global finance: a developmental challenge to the neoliberal consensus?," LSE Research Online Documents on Economics 118296, London School of Economics and Political Science, LSE Library.
    3. Milan Babic & Javier Garcia-Bernardo & Eelke M. Heemskerk, 2020. "The rise of transnational state capital: state-led foreign investment in the 21st century," Review of International Political Economy, Taylor & Francis Journals, vol. 27(3), pages 433-475, May.
    4. Muyang Chen & Johannes Petry, 2023. "What about the dragon in the room? Incorporating China into international political economy (IPE) teaching," Review of International Political Economy, Taylor & Francis Journals, vol. 30(3), pages 801-822, May.
    5. Imogen T. Liu & Adam D. Dixon, 2021. "Legitimating State Capital: The Global Financial Professions and the Transnationalization of Chinese Sovereign Wealth," Development and Change, International Institute of Social Studies, vol. 52(5), pages 1251-1273, September.
    6. Johannes Petry & Jan Fichtner & Eelke Heemskerk, 2021. "Steering capital: the growing private authority of index providers in the age of passive asset management," Review of International Political Economy, Taylor & Francis Journals, vol. 28(1), pages 152-176, January.
    7. Fichtner, Jan & Heemskerk, Eelke M. & Garcia-Bernardo, Javier, 2017. "Hidden power of the Big Three? Passive index funds, re-concentration of corporate ownership, and new financial risk†," Business and Politics, Cambridge University Press, vol. 19(2), pages 298-326, June.
    Full references (including those not matched with items on IDEAS)

    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. Takayuki Mizuno & Shohei Doi & Shuhei Kurizaki, 2020. "The power of corporate control in the global ownership network," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-19, August.
    2. Baines, Joseph & Hager, Sandy Brian, 2022. "From Passive Owners to Planet Savers? Asset Managers, Carbon Majors and the Limits of Sustainable Finance," EconStor Preprints 249674, ZBW - Leibniz Information Centre for Economics.
    3. Albina Gibadullina, 2024. "Who owns and controls global capital? Uneven geographies of asset manager capitalism," Environment and Planning A, , vol. 56(2), pages 558-585, March.
    4. Benjamin Braun & Brett Christophers, 2024. "Asset manager capitalism: An introduction to its political economy and economic geography," Environment and Planning A, , vol. 56(2), pages 546-557, March.
    5. Fichtner, Jan & Heemskerk, Eelke & Petry, Johannes, 2021. "The new gatekeepers of financial claims: States, passive markets, and the growing power of index providers," SocArXiv x45j3, Center for Open Science.
    6. Bruno Bonizzi & Annina Kaltenbrunner, 2024. "International financial subordination in the age of asset manager capitalism," Environment and Planning A, , vol. 56(2), pages 603-626, March.
    7. Simon Hartmann & Thomas Lindner & Jakob Müllner & Jonas Puck, 2022. "Beyond the nation-state: Anchoring supranational institutions in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1282-1306, August.
    8. Loureiro, Gilberto & Mendonça, Cesar, 2024. "Do large registered investment funds undermine shareholder activism? Evidence from hedge fund proposals," Journal of Banking & Finance, Elsevier, vol. 162(C).
    9. Meg Adachi-Sato & Hiroshi Osano, 2023. "Sustainable Investing Under Delegated Investment Management," Discussion Paper Series DP2023-01, Research Institute for Economics & Business Administration, Kobe University, revised May 2023.
    10. Kitajima, Kiichi, 2022. "Passive investors and concentration of intraday liquidity: Evidence from the Tokyo Stock Exchange," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    11. Newham, M. & Seldeslachts, J. & Banal-Estanol, A., 2018. "Common Ownership and Market Entry: Evidence from the Pharmaceutical Industry," Working Papers 18/03, Department of Economics, City University London.
    12. Leruth, Luc & Mazarei, Adnan & Regibeau, Pierre & Renneboog, Luc, 2022. "Green Energy Depends on Critical Minerals. Who Controls the Supply Chains?," Discussion Paper 2022-024, Tilburg University, Center for Economic Research.
    13. Baines, Joseph & Hager, Sandy Brian, 2021. "Commodity Traders in a Storm: Financialization, Corporate Power and Ecological Crisis," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue Latest Ar.
    14. Jang-Sup Shin, 2018. "The Subversion of Shareholder Democracy and the Rise of Hedge-Fund Activism," Working Papers Series 77, Institute for New Economic Thinking.
    15. Nardy Antunes, Davi José & Tunes Mazon, Marilia & Cardoso de Mello, João Manuel, 2023. "The Economic Possibilities of Technological Progress: Business Restructuring and the Labor Market in the 21st Century," MPRA Paper 120397, University Library of Munich, Germany.
    16. Banerjee, Ameet Kumar & Sensoy, Ahmet & Goodell, John W., 2024. "Connectivity and spillover during crises: Highlighting the prominent and growing role of green energy," Energy Economics, Elsevier, vol. 129(C).
    17. Azar, José & Duro, Miguel & Kadach, Igor & Ormazabal, Gaizka, 2021. "The Big Three and corporate carbon emissions around the world," Journal of Financial Economics, Elsevier, vol. 142(2), pages 674-696.
    18. Daniela Gabor, 2021. "The Wall Street Consensus," Development and Change, International Institute of Social Studies, vol. 52(3), pages 429-459, May.
    19. Agathe Sadeghi & Zachary Feinstein, 2024. "Statistical Validation of Contagion Centrality in Financial Networks," Papers 2404.14337, arXiv.org.
    20. Kocherlakota Satya Pritam & Trilok Mathur & Shivi Agarwal & Sanjoy Kumar Paul & Ahmed Mulla, 2022. "A novel methodology for perception-based portfolio management," Annals of Operations Research, Springer, vol. 315(2), pages 1107-1133, August.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:osf:socarx:asx7t. 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: OSF (email available below). General contact details of provider: https://arabixiv.org .

    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.