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The investment-profit nexus in an era of financialisation and globalisation. A profit-centred perspective

Author

Listed:
  • Cédric Durand

    (CEPN, Université Paris 13 (FR))

  • Maxime Gueuder

Abstract

During the past decades, the link between profits and domestic investment has weakened in the biggest high-income economies. The present contribution explores this relaxation of the profits-investment nexus through a profit-centred perspective. Focusing on the impact of the origins and uses of profits, we study the investment behaviour of non-financial corporations in relation to their profits at the macro level since 1980, a period marked by financialisation and globalisation. We contrast three competing hypotheses – the Revenge of the Rentiers, the Financial Turn of Accumulation and Globalisation – and test them through a macro panel data analysis for France, Germany, Italy, Japan, the United Kingdom and the United States over the period 1980-2012.

Suggested Citation

  • Cédric Durand & Maxime Gueuder, 2016. "The investment-profit nexus in an era of financialisation and globalisation. A profit-centred perspective," Working Papers PKWP1614, Post Keynesian Economics Society (PKES).
    • Handle: RePEc:pke:wpaper:pkwp1614
    as

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    References listed on IDEAS

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    Cited by:

    1. Bonizzi, Bruno & Kaltenbrunner, Annina & Powell, Jeffrey, 2019. "Subordinate financialization in emerging capitalist economies," Greenwich Papers in Political Economy 23044, University of Greenwich, Greenwich Political Economy Research Centre.

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    More about this item

    Keywords

    profits; investment; financialisation; globalisation; macro panel analysis;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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