Non-financial firms increasingly resemble financial corporations through revenue reliance

Evidence

While evidence of financial control of non-financial corporations remains elusive, the increasing dependence of non-financial firms on financial activities as a source of revenue is critical for understanding the behaviour of these firms.Indeed,the very elusiveness of the control debate reflects the fact that the distinction between forces operating ‘inside’and ‘outside’non-financial corporations is becoming increasingly arbitrary. Non-financial corporations are beginning to resemble financial corporations—in some cases, closely—and we need to take this insight to our studies of corporate behaviour. — Greta R. Krippner, The Financialization of the American…, 136

Categorization

• DEFINE: Clarifies how ‘financialization’ of non-financial firms is operationalized: revenue dependence on financial activities rather than ownership control.
• XREF: Connects to the control-vs-fuel debate in financialization literature (Froud et al., Stockhammer) on the field’s foundational dispute. — connects to: Nonfinance firms increasingly derived income from financial markets — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 18; Deregulation let non-finance firms pursue financial activities, fueling debt expansion — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 40; Major nonfinancial corporations shifted their earnings toward financial operations — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 45 (+4 more)

Related

• Nonfinance firms increasingly derived income from financial markets (similarity 0.84)
• Financialization comprises both finance-sector dominance and nonfinance firms’ financial investing. (similarity 0.83)
• Financialization can be measured by comparing non-financial firms’ portfolio income to their cash flow. (similarity 0.82)
• Nonfinance-firm financialization has received little research attention. (similarity 0.81)
• Financialization shifted corporate power from manufacturing and marketing executives toward financial executives. (similarity 0.80)
• Stagnating growth plus deregulation pushed firms from production into financial investment (similarity 0.79)
• Multi-layered subsidiary ownership now prevails over the multidivisional corporate form in the US (similarity 0.79)
• Finance has come to dominate American economic life. (similarity 0.79)
• Financial profits relative to non-financial profits rose three to fivefold by the late 1990s. (similarity 0.78)

Broader Connections

• Financialization fragments corporate, state, and individual horizons into short-termism #expands (0.82) — Max Haiven, Cultures of Financialization, 138