The Theoretical Causes of Financialization: An Analysis of Globalization and Non-financial Firms

• In Event: 156 - Section on Global and Transnational Sociology Refereed Roundtable Session and Business Meeting
  In Refereed Roundtable 60min: Table 01. Capital and Global Ties

Abstract

Political economy perspectives of the nation state, have theorized that the removal of financial regulations in the larger context of globalization has been largely responsible for structural changes in the macro economy such as the increasing hegemony of the financial sector along with the increasing financial activities of many non-financial firms. Such institutional perspectives of the economy tend to view globalization as an exogenous shock rather than an ever increasing pressure on American industries. I test the long term impacts of globalization on the financial activities of nonfinancial industries with a pooled dataset of American industries from 1970 to 2008. In order to do this, I constructed new quantitative measures of market regulation derived directly from the literature on financialization. I find that globalization has an enduring effect on financialization net of other contemporary explanations of financialization such as public policies and Shareholder value theory.

Author

• Paul Joseph Peterson, University of California, Riverside