Financialization is measured as the ratio of financial receipts to business receipts.

Evidence

The central explanatory variable in our analysis is industry-level financialization. We follow Krippner’s ð2005Þ measure and calculate it as the ratio of financial receipts—which include interest, dividends, and capital gains— to business receipts, the revenue generated from the selling of goods and services. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 66

The central explanatory variable in our analysis is industry-level financialization. We follow Krippner’s ð2005Þ measure and calculate it as the ratio of financial receipts—which include interest, dividends, and capital gains— to business receipts, the revenue generated from the selling of goods and services. Figure 2 presents the trajectories of financialization for nonfinance industries. Each trajectory here is estimated with an industry-specific regression of the financialization ratio on year and has two components. One is the constant or the initial level of financialization ðY-axisÞ; the other is the slope or the average yearly growth ðX-axisÞ. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 66

Categorization

• DEFINE: Sets the operational definition of financialization used across the analysis.
• corroborated: 2 independent passages support this claim — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 66
• XREF: connects to: Financialization can be measured by comparing non-financial firms’ portfolio income to their cash flow. — Greta R. Krippner, The Financialization of the American…, 47; Depreciation allowances bias both profit and cash-flow measures of financialization in opposite directions. — Greta R. Krippner, The Financialization of the American…, 71

Related

• Financialization can be measured by comparing non-financial firms’ portfolio income to their cash flow. (similarity 0.91)
• Financialization comprises both finance-sector dominance and nonfinance firms’ financial investing. (similarity 0.85)
• Financialization must be measured by profit generation, not employment or output (similarity 0.85)
• Financialization marks a decisive shift from production-based to finance-driven accumulation. (similarity 0.84)
• Nonfinance firms increasingly derived income from financial markets (similarity 0.83)
• Financialization does not measurably raise firm profits or financial-asset productivity. (similarity 0.83)
• Financial profits relative to non-financial profits rose three to fivefold by the late 1990s. (similarity 0.83)
• The US economy became increasingly financialized in the post-1970s period. (similarity 0.82)
• Measuring finance’s rise by profits misleads if grouped under services. (similarity 0.81)
• Industry-level financialization trajectories vary far more than macroeconomic accounts showed (similarity 0.81)
• Measuring profits rather than employment reveals financialization as the dominant economic trend (similarity 0.81)
• Nonfinancial firms’ portfolio income relative to cash flow surged by the late 1980s (similarity 0.81)
• Depreciation allowances bias both profit and cash-flow measures of financialization in opposite directions. (similarity 0.80)
• Financialization both derives profits from finance and drains capital from productive investment (similarity 0.80)
• Financialization cannot be reduced to stock market developments. (similarity 0.80)

Broader Connections

• Financialization can be measured by comparing non-financial firms’ portfolio income to their cash flow. #expands (0.85) — Greta R. Krippner, The Financialization of the American…, 47
• Depreciation allowances bias both profit and cash-flow measures of financialization in opposite directions. #qualifies (0.80) — Greta R. Krippner, The Financialization of the American…, 71