The Effect of Financialization on Investment by Non-Financial Private Sector in Spain: an Empirical Analysis

Kuzmina, Anastasia F.; Rozmainsky, Ivan V.

doi:10.17835/2076-6297.2020.12.3.060-082

Cited by 3 publications

(4 citation statements)

References 10 publications

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“…Our results are consistent with those of other authors obtained in other countries. So, for example, our results are comparable (but not completely so) to the results obtained by Tori and Onaran (2018) for the UK, Kuzmina and Rozmainsky (2020) for Spain-2020, Stockhammer (2004 for European countries , and Orhangazi (2008) for the USA. So, for example, we, like most authors, found that financial expenses have the strongest negative impact on investment in all companies and at all time periods.…”

Section: Discussionsupporting

confidence: 84%

“…Financial incomes had a positive effect on investment only for small British companies (Tori andOnaran, 2018, p. 1410). Furthermore, Kuzmina and Rozmainsky (2020) applied the same methodology to Spanish firms and came to the conclusion that, even for small companies, financial incomes had a negative effect on investment.…”

Section: The Post-keynesian Model Of Investment As the Starting Pointmentioning

confidence: 99%

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An empirical analysis of the influence of financialization on investment in Russia

Tretyakov¹,

Rozmainsky²

2021

RUJEC

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This paper tries to estimate the impact of financialization on fixed investment in Russia. The work is carried out by using panel data based on reports of non-financial publicly listed companies for 1999–2019. The study finds that financial expenses aimed at paying interest on external financing and paying dividends — that is, focusing on shareholder value, and hence decreasing the internal funds of companies, reduce real investments. Financial incomes have shown the crowding-out effect for large companies. Financial incomes as additional “free” funds in large companies are not perceived as an opportunity to accumulate fixed assets. Managers prefer to increase financial investments instead of real ones. In small and medium-sized companies, financial incomes, however, drive the growth of physical investment. This is because small firms, at a particular stage in their lives, find it more profitable to invest in their own growth. The results from the general sample, without dividing by size, indicate that financialization in Russia clearly reduces real investment.

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Section: Discussionsupporting

confidence: 84%

Section: The Post-keynesian Model Of Investment As the Starting Pointmentioning

confidence: 99%

An empirical analysis of the influence of financialization on investment in Russia

Tretyakov¹,

Rozmainsky²

2021

RUJEC

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“…Financialization can also be viewed from a behavioral perspective, as it can change some norms of economic behavior of economic entities, norms that affect the assessment of the future time. Some authors find financialization to be encouraging people to focus on high short-term economic outcomes (Kuzmina and Rozmainsky, 2020;Tretyakov and Rozmainsky, 2021). At the same time, this is found to be especially applicable to managers of firms who seek to raise the market value of the financial assets of these firms as high as possible in exchange for some "bonuses" from shareholders.…”

Section: Theoretical Aspects 21 Financialization and Its Aftermathmentioning

confidence: 99%

“…Studies of the implications of financialization mainly concern its impact on corporations' investment behavior, and many have already been carried out in some countries of the developed world, such as the US (Orhangazi, 2008;Lin and Tomaskovic-Devey, 2013), peripheral countries (Cibils and Allami, 2013;Rodrigues et al, 2016), some European countries (Stockhammer, 2004;Álvarez, 2012;Barradas et al, 2018;Alvarez, 2015;Tori and Onaran, 2018;Kuzmina and Rozmainsky, 2020) and Russia (Tretyakov and Rozmainsky, 2021). For Italy, such an analysis has been carried out as well due to the actuality of the issue for this country.…”

Section: Introductionmentioning

confidence: 99%

An empirical analysis of the influence of financialization on the innovative activity of the firms’ managers in Italy

Tarverdyan

Rozmainsky

2023

Terra Econ.

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This paper contributes to the discussion about the impact of financialization on the innovative activity of firms. The initial hypothesis was whether financialization has negative impact on the innovative activity of a company as a consequence of investment short-termism of managers who are not motivated to invest in risky innovative initiatives with a long payback period. Assumptions are made through analyzing the relationship between financial indicators (financial expenses and incomes) and investments in research and development on the sample of Italian publicly listed non-financial corporations. The article tests whether financialization leads to short-termism of company managers forcing them not to invest in risky innovative initiatives with a long payback period. Econometric analysis reveals that financial income of Italian non-financial companies was found to be positively associated with their R&D expenses. This finding may support the economic theory of the mainstream literature, which argues for the beneficial effects of financialization on the economic growth and is inconsistent with many empirical results received by the Post Keynesian authors. The possible reason for it is that the motivation of the Italian managers may be different from the Anglo-Saxon managers' one and not characterized by the shareholder value orientation and short-termism.

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Financialization and innovation activity of Russian companies: Empirical research

Fokin,

Rozmainsky

2024

RUJEC

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In this paper, we conducted an empirical study to assess the nature of the relationship between financialization and the level of innovation activity in Russian publicly listed companies. We relied on previous research in this area and on the models proposed by the researchers. In the empirical part, we prepared four models, based on the sample including 245 Russian publicly listed companies and having the observation period from 2000 to 2021. We applied Ordinary Least Square (OLS), Pooled Least Square (PLS) models, as well as panel data models with fixed and random effects. According to our hypotheses, financialization has a negative impact on the level of innovation in firms and its impact is varying for firms with different levels of financial constraints. The results of the study have shown that these hypotheses were partially confirmed. We have been convinced of the negative impact of financialization on innovation activity, however, if financial constraints were taken into account, not all coefficients had an unambiguous interpretation. Our assumptions and the results obtained, which generally confirmed the hypotheses put forward, are based on a theoretical understanding of the role of shareholder value orientation in this process. Confirmation of these assumptions is set as the goal of further research.

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The Effect of Financialization on Investment by Non-Financial Private Sector in Spain: an Empirical Analysis

Cited by 3 publications

References 10 publications

An empirical analysis of the influence of financialization on investment in Russia

An empirical analysis of the influence of financialization on investment in Russia

An empirical analysis of the influence of financialization on the innovative activity of the firms’ managers in Italy

Financialization and innovation activity of Russian companies: Empirical research

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