Last modified: 2018-06-20
Abstract
Everybody knows that capital accumulation is the prime mover of the modern process of economic growth and ultimately depends on the share of surplus devoted to investment. Yet few economists seem to be aware that the latter, in turn, depends mainly on corporate savings decisions, which are closely connected to the features of corporate governance and the forms of competition.
Most models of investment decisions utilised in macroeconomic models take free or perfect competition as explicit or implicit assumption. However, the oligopolistic structure of most real markets lead to corporate strategic behaviours that can lead to/produce distinctly different results. Strategic decisions, connected with agency problems, can play a major role in producing financialisation and timing the rhythms of real investment.
The paper deals with both mainstream and heterodox contributions that analyse the effects of corporate governance and strategic behaviours on portfolio management and investment decisions in big corporations, seeking to determine how these effects might play a major role in producing growing liquidity holdings and financialisation. The main objective is to understand whether these models can explain the tendency to put growing shares of social surplus into speculative financial channels, thereby contributing to long-term real stagnation.