2016/25 | LEM Working Paper Series | ||||||||||||||||
Financial regimes, financialization patterns and industrial performances: preliminary remarks |
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Giovanni Dosi, Valerie Revest and Alessandro Sapio |
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Keywords | |||||||||||||||||
Evolutionary Theory, Financial Systems, Firm growth, Innovation, Financialization
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JEL Classifications | |||||||||||||||||
B52, G2, G3, L2, O3
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Abstract | |||||||||||||||||
The evolutionary taxonomy of financial systems, outlined by Dosi
(1990), argued that market-based systems would be comparatively more
engaged in the exploration of new technological paradigms, as an
outcome of market selective pressure, whereas the more
institutionalized finance allocation in credit-based systems would
give them an advantage in cumulative learning. This article offers a
preliminary assessment of those conjectures in light of the
institutional change associated with the financialization process and
the "maximizing shareholders value" principle. The available evidence
suggests that financialization has de-linked the performance of firms
on the financial markets from the determinants of firm-level growth
and innovation. Selection among companies increasingly occurs on
financial markets, along criteria of short-term returns. As such,
financialization has contributed to compress and somewhat degrade the
specific properties of the finance-innovation nexus of both financial
system archetypes, deteriorating both static and Schumpeterian
efficiency.
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