Pages - Menu

CFP: FINANCIALISATION IN DEVELOPING AND EMERGING ECONOMIES: MANIFESTATIONS, DRIVERS AND IMPLICATIONS


Financialisation in developing and emerging economies:
Manifestations, Drivers and Implications

Overview

The Special Issue aims to provide an assessment of the financialisation process in developing and emerging economies (DEEs). It invites contributions on the theoretical and empirical specificities of the manifestations, drivers and implications of this process in these economies. It encourages interdisciplinary work, both in theory and method, and is particularly interested in papers, which make a conceptual contribution to the literature.

The analysis of financialisation in DEEs is relatively novel (Bonizzi, 2013). It is rooted in earlier discussions about the risks of financial globalisation and liberalisation, including the Latin American Structuralist literature on the hegemonic role of the US dollar (Belluzzo, 1997; Braga, 1997; de Mello, 1997; Fiori, 1997; Miranda, 1997; Tavares, 1997; Tavares & Melin, 1997); the debate on capital account liberalisation and capital market integration (Cohen, 1996; Rodrik, 1998; Stiglitz & Ocampo, 2008; Strange, 1994); the Minsky-inspired currency and boom bust dynamics of financial crisis in developing economies (Arestis & Glickman, 2002; de Paula & Alves, 2000; Dymski, 1999; Kregel, 1998; Schroeder, 2002); and the critique of financial liberalisation and integration of DEEs (Akyuz & Boratav, 2005; Barbosa‐Filho, 2005; Crotty & Lee, 2005; Frenkel & Rapetti, 2009; Grabel, 2003; O’Connell, 2005; Palma, 1998; Taylor, 1998).

Recently, a literature has emerged which looks more directly at the financialisation of DEEs. One strand of this literature has focused on its international dimension, particularly the ability of both foreign and domestic actors to exploit interest rate differentials and exchange rate volatility through their increasing participation in asset trading and the political economy implications of such a process (Hardie, 2012; Kaltenbrunner, 2010, 2015; Kaltenbrunner & Painceira, 2009; Powell, 2013). This aspect of DEE financialisation is associated with, and reinforced by, the structural dependence of DEEs on capital inflows, which demands appropriate economic policies, such as overvalued exchange rates and high interest rates, that guarantee and contribute to generate attractive financial returns (Becker, Jäger, Leubolt, & Weissenbacher, 2010; Medialdea, 2013).  Indeed, a key issue in this literature is the extent to which DEE governments have been compelled to provide liquidity to financial markets, as financial investors increased their influence on the domestic currency and made exchange rate management more difficult (Datz, 2008; Epstein & Yeldan, 2008; Kaltenbrunner, 2010, 2015; Kaltenbrunner & Painceira, 2015; Painceira, 2010, 2011; Papadatos, 2009). This is closely associated with growing national public debt which, in a context of floating exchange rates and currency hierarchy, has been understood as a core feature of financialisation in DEEs, as government bonds are used to mitigate and protect the country against investor speculation, usually by accumulation of foreign exchange reserves and their use as a hedge mechanism (Alves, 2017; Correa, Vidal, & Marshall, 2012; Ertürk, 2003; Hardie, 2012; Painceira, 2009, 2010).

Another strand of the literature has sought to map the financialisation phenomena encountered in the Anglo-Saxon core onto DEEs. For example, empirical evidence has been used to show the transformation of non-financial corporations (NFCs), i.e., their shift from being primarily involved in real sector activities to becoming financial actors themselves. The debate draws attention to their costly efforts to increase shareholder value, which induces NFCs to decrease productive investments (and employment), affects wages negatively, and increases their vulnerability to (international) market conditions (Araújo, Bruno, & Pimentel, 2012; Correa & Vidal, 2012; Demir, 2007; Farhi & Borghi, 2009; Kalinowski & Cho, 2009; Karwowski, 2012; Powell, 2013; Rossi, 2013; Seo, Kim, & Kim, 2012; Tan, 2014). Further, the literature shows that DEE NFCs have started to rely on long-term bond issuance rather than bank borrowing which has sometimes been associated with a move from bank-based systems towards market-based financial systems (Becker et al., 2010; Kaltenbrunner & Karacimen, 2016; Lee, 2012; Powell, 2013; Rethel, 2010). Related analyses have examined financialisation in DEEs from the perspective of changes in the financial sector, such as the entry of foreign banks in DEEs and the adoption of practices found in financialised developed countries, in particular, lending to individuals for mortgages and consumption, which has in turn resulted in rising levels of individual indebtedness as well as the creation of new tradable financial securities based on these cash flows (Ashman, Fine, & Newman, 2010; Cho, 2010; dos Santos, 2013; Gabor, 2010; Karwowski, 2012; Lapavitsas, 2009; Sagemann & Reese, 2011; Aitken, 2014; Mawsdley, 2017).

The above review reflects a rising interest in the issue of DEE financialisation, its manifestations, drivers and implications. The Cambridge Journal of Economics has been a leading outlet for these discussions over the years, as also testified by its recent Special Issue on “Towards Financialisation and the rise of New Capitalism?”. However, despite this rising interest, many questions still remain unanswered. For example, what, if any, are the specific features of financialisation in DEEs? Can domestic public debt (Alves, 2017; Painceira, 2009) or high interest rates (Becker et al., 2010) be identified as such common features? Does mapping the phenomena encountered in the Anglo-Saxon core onto DEEs overlook the structural differences of these economies and, therefore, their different financialisation practices and features? And how can we conceptualise financialisation in DEEs? Is it subordinate (Powell, 2013) dependent (Gabor, 2018), variegated (Brown et al, 2017; Karwowski, et al, 2017; Lai and Daniels, 2017)?  Or all of this?  In this vein, can financialisation processes be compared between DEEs? What are the roles of different institutions, policies and indeed locational factors in shaping these processes? Is financialisation driven rather by international factors or by autonomous domestic political economy processes (Lai and Daniels; 2017 Lapavitsas, 2009; Lapavitsas and Powell, 2013)? And if the former, what is the link between DEEs’ financialisation and their ‘real’ international integration into international production networks? Finally, on an empirical level, and taking into account all of this, how should we investigate financialisation in DEEs? Is it possible to delineate financial development and deepening from financialisation in DEEs, and to what extent can it be quantified (Karwowski and Stockhammer, 2017)?

An indicative, and by no means exhaustive, list of questions that might be addressed in the SI includes:

  • How can financialisation in DEEs be conceptualised and theorized? What is the contribution of different disciplines in theorising financialisation in DEEs?
  • What drives financialisation in DEEs? Is DEE financialisation largely driven by their relation with developed countries or are these autonomous processes?
  • What are the distinct features of financialisation in DEEs? Can we use the experience of advanced economies as a starting point?
  • What are the commonalities and differences between DEEs’ experiences with financialisation?
  • How can financialisation be located empirically in DEEs? Can it be quantified? What methods are adequate to investigate financialisation in DEEs?
  • How is financialisation related to the ‘productive’ international integration of DEEs?
  • What is the role of the state in shaping financialisation in DEEs? Are there specific actors influencing the process?
  • What are the implications of financialisation for development, structural change, employment and income distribution?
  • What are the policy implications we can draw from the financialisation processes in DEEs?

Submission of Papers

The deadline for the submission of papers is 31st May 2020. Submissions should be made using the journal’s online submission system.

During the submission process, authors should indicate that the manuscript is a candidate for the Special Issue titled Financialisation in developing and emerging economies: distinct manifestations, drivers and implications. Authors are also advised to include a note indicating this in a covering letter that can be uploaded during the submission process. All papers submitted will be considered using the CJE’s normal peer review process. Please refer to the Journal’s information for authors. In line with the general guidelines of the Cambridge Journal of Economics, manuscripts submitted for this Special Issue should seek to limit the usage and preferably avoid mathematical modelling.


Further Information

Carolina Alves: cca30@cam.ac.uk
Bruno Bonizzi: b.bonizzi@herts.ac.uk
Annina Kaltenbrunner: A.Kaltenbrunner@leeds.ac.uk


References

  • Akyuz, Y., & Boratav, K. (2005). The Making of the Turkish Financial Crisis. In G. A. Epstein (Ed.), Financialization and the world economy. Cheltenham, UK; Northampton, MA: Edward Elgar.
  • Alves, C. C. (2017). Stabilisation or Financialisation? Examining the Dynamics of the Brazilian Public Debt (PhD thesis). SOAS, University of London, London.
  • Araújo, E., Bruno, M., & Pimentel, D. (2012). Financialization against Industrialization: a regulationnist approach of the Brazilian Paradox. Revue de La Régulation. Capitalisme, Institutions, Pouvoirs.
  • Arestis, P., & Glickman, M. (2002). Financial crisis in Southeast Asia: dispelling illusion the Minskyan way. Cambridge Journal of Economics, 26, 237–260.
  • Ashman, S., Fine, B., & Newman, S. (2010). The Crisis in South Africa: Neoliberalism, Financialization and Uneven and Combined Development. Socialist Register, 47.
  • Barbosa‐Filho, N. H. (2005). International Liquidity and Growth Fluctuations in Brazil. In G. A. Epstein (Ed.), Financialization and the world economy. Cheltenham, UK; Northampton, MA: Edward Elgar.
  • Becker, J., Jäger, J., Leubolt, B., & Weissenbacher, R. (2010). Peripheral Financialization and Vulnerability to Crisis: A Regulationist Perspective. Competition & Change, 14, 225–247.
  • Belluzzo, L. G. (1997). Dinheiro e a transfiguração da riqueza. In M. da C. Tavares & J. L. Fiori (Eds.), Poder e dinheiro: uma economia política da globalização (pp. 151–193). Editora Vozes.
  • Bonizzi, B. (2013). Financialization in Developing and Emerging Countries. International Journal of Political Economy, 42, 83–107.
  • Braga, J. C. de S. (1997). Financeirização global: o padrão sistêmico de riqueza do capitalismo contemporâneo. In M. da C. Tavares & J. L. Fiori (Eds.), Poder e dinheiro: uma economia política da globalização (pp. 195–242). Petropolis: Editora Vozes.
  • Cho, H. (2010). South Korea’s Experience with Banking Sector Liberalisation. Amsterdam: The Centre for Research on Multinational Corporation.
  • Cohen, B. J. (1996). Phoenix Risen: The Resurrection of Global Finance. World Politics, 48, 268–296.
  • Correa, E., & Vidal, G. (2012). Financialization and Global Financial Crisis in Latin American Countries. Journal of Economic Issues (M.E. Sharpe Inc.), 46, 541–548.
  • Correa, E., Vidal, G., & Marshall, W. (2012). Financialization in Mexico: trajectory and limits. Journal of Post Keynesian Economics, 35, 255–275.
  • Crotty, J., & Lee, K.-K. (2005). The Causes and Consequences of Neoliberal Restructuring in Post-Crisis Korea. In G. A. Epstein (Ed.), Financialization and the world economy. Cheltenham, UK; Northampton, MA: Edward Elgar.
  • Datz, G. (2008). Adaptable Agendas: Private Creditors and the Politics of Debt in Emerging Markets. In J. Robertson (Ed.), Power and Politics After Financial Crises: Rethinking Foreign Opportunism in Emerging Markets (2008 edition, pp. 82–101). Basingstoke England; New York: AIAA.
  • de Mello, J. M. C. (1997). Prólogo. In M. da C. Tavares & J. L. Fiori (Eds.), Poder e dinheiro: uma economia política da globalização (pp. 15–24). Petropolis: Editora Vozes.
  • de Paula, L. F. R. D., & Alves, A. J. J. (2000). External Financial Fragility and the 1998-1999 Brazilian Currency Crisis. Journal of Post Keynesian Economics, 22, 589–617.
  • Demir, F. (2007). The Rise of Rentier Capitalism and the Financialization of Real Sectors in Developing Countries. Review of Radical Political Economics, 39, 351–359.
  • dos Santos, P. L. (2013). A cause for policy concern: the expansion of household credit in middle-income economies. International Review of Applied Economics, 27, 316–338.
  • Dymski, G. (1999). Asset Bubbles and Minsky Crises in East Asia: A Spatialized Minsky Approach. Research Paper, Department of Economics, University of California-Riverside.
  • Epstein, G., & Yeldan, E. (2008). Inflation targeting, employment creation and economic development: assessing the impacts and policy alternatives. International Review of Applied Economics, 22, 131–144.
  • Ertürk, I. (2003). Governance or financialisation: The Turkish case. Competition and Change, 7, 185–204.
  • Farhi, M., & Borghi, R. A. Z. (2009). Operations with financial derivatives of corporations from emerging economies. Estudos Avançados, 23, 169–188.
  • Fiori, J. L. (1997). Globalização, hegemonia e império. In M. da C. Tavares & J. L. Fiori (Eds.), Poder e dinheiro: uma economia política da globalização (pp. 87–147). Editora Vozes.
  • Frenkel, R., & Rapetti, M. (2009). A developing country view of the current global crisis: what should not be forgotten and what should be done. Cambridge Journal of Economics, 33, 685–702.
  • Gabor, D. (2010). (De)Financialization and Crisis in Eastern Europe. Competition & Change, 14, 248–270.
  • Gabor, D. (2018). Understanding the financialisation of international development through 11 FAQs. Washington, DC: Heinrich Boell Stiftung North America
  • Grabel, I. (2003). Averting crisis? Assessing measures to manage financial integration in emerging economies. Cambridge Journal of Economics, 27, 317–336.
  • Hardie, I. (2012). Financialization and Government Borrowing Capacity in Emerging Markets. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.
  • Kalinowski, T., & Cho, H. (2009). The Political Economy of Financial Liberalization in South Korea: State, Big Business, and Foreign Investors. Asian Survey, 49, 221–242.
  • Kaltenbrunner, A. (2010). International Financialization and Depreciation: The Brazilian Real in the International Financial Crisis. Competition & Change, 14, 296–323.
  • Kaltenbrunner, A. (2015). Financial integration and exchange rate determination: a Brazilian case study. International Review of Applied Economics, 29, 129–149.
  • Kaltenbrunner, A., & Karacimen, E. (2016). The Contested Nature of Financialization. In T. Subasat (Ed.), The Great Financial Meltdown: Systemic, Conjunctural or Policy-Created? Cheltenham, UK: Edward Elgar Publishing Ltd.
  • Kaltenbrunner, A., & Painceira, J. P. (2009). New Forms of External Vulnerability: Brazil in the Global Financial Crisis (RMF Discussion Papers No. 15). London: SOAS, University of London.
  • Kaltenbrunner, A., & Painceira, J. P. (2015). Developing countries’ changing nature of financial integration and new forms of external vulnerability: the Brazilian experience. Cambridge Journal of Economics, 39, 1281–1306.
  • Karwowski, E. (2012). Financial Operations of South African Listed Firms: Growth and Financial Stability in an Emerging Market Setting. Presented at the III Conferência Internacional do IESE - “Moçambique: Acumulação e Transformação num Contexto de Crise Internacional,” Moçambique.
  • Karwowski, E., Shabani, M.; & Stockhammer, E. (2017) Financialization: Dimensions and determinants. A cross-country study. Economics Discussion Papers, no. 2017-01. Kingston upon Thames, U.K.: Faculty of Arts and Social Sciences, Kingston University.
  • Kregel, J. A. (1998). Yes, “It” Did Happen Again: A Minsky Crisis Happened in Asia (Economics Working Paper Archive No. wp_234). Levy Economics Institute.
  • Lapavitsas, C. (2009). Financialisation Embroils Developing Countries (RMF Discussion Papers No. 14). London: SOAS, University of London.
  • Lee, J.-Y. (2012, October). Financialization and Transformation of the East Asian Economies. IIPPE Working Paper No 12, SOAS, University of London.
  • Medialdea, B. (2013). Brazil: an economy caught in a financial trap (1993-2003). Revista de Economia Política, 33, 427–445.
  • Miranda, J. C. da R. (1997). Dinâmica financeira e política macroeconômica. In M. da C. Tavares & J. L. Fiori (Eds.), Poder e dinheiro: uma economia política da globalização. Editora Vozes.
  • O’Connell, A. (2005). The Recent Crisis – and Recovery – of the Argentine Economy: Some Elements and Background. In G. A. Epstein (Ed.), Financialization and the world economy. Cheltenham, UK; Northampton, MA: Edward Elgar.
  • Painceira, J. P. (2009). Developing Countries in the Era of Financialisation: From Deficit Accumulation to Reserve Accumulation (RMF Discussion Papers No. 4). London: SOAS, University of London.
  • Painceira, J. P. (2010). The Financial Crisis of 2007–09 and Emerging Countries: The Political Economy Analysis of Central Banks in the Brazilian and Korean Economies. Competition & Change, 14, 271–295.
  • Painceira, J. P. (2011). Central banking in middle income countries in the course of financialisation : a study with special reference to Brazil and Korea. SOAS, University of London.
  • Palma, G. (1998). Three and a half cycles of ‘mania, panic, and [asymmetric] crash’: East Asia and Latin America compared. Cambridge Journal of Economics, 22, 789–808.
  • Papadatos, D. (2009, February 15). Central Banking in Contemporary Capitalism: Monetary Policy and its Limits. RMF Discussion Papers No. 5, SOAS, University of London.
  • Powell, J. (2013). Subordinate financialisation: a study of Mexico and its non-financial corporations (PhD). SOAS, University of London, London.
  • Rethel, L. (2010). Financialisation and the Malaysian Political Economy. Globalizations, 7, 489–506.
  • Rodrik, D. (1998). Has Globalization Gone Too Far? Challenge, 41, 81–94.
  • Rossi, J. (2013). Hedging, selective hedging, or speculation? Evidence of the use of derivatives by Brazilian firms during the financial crisis. Journal of Multinational Financial Management, 23, 415–433.
  • Sagemann, B., & Reese, P. (2011). The Great Subprime Credit Crisis and its Impact on Eastern Europe. In J. Jungmann & B. Sagemann (Eds.), Financial crisis in Eastern Europe: road to recovery. Wiesbaden: Gabler.
  • Schroeder, S. K. (2002). A Minskian Analysis of Financial Crisis in Developing Countries. SCEPA working paper series., New York.
  • Seo, H. J., Kim, H. S., & Kim, Y. C. (2012). Financialization and the Slowdown in Korean Firms’ R&D Investment. Asian Economic Papers, 11, 35–49.
  • Stiglitz, J., & Ocampo, J. A. (Eds.). (2008). Capital Market Liberalization And Development. Oxford ; New York: Oxford University Press, U.S.A.
  • Strange, S. (1994). States and markets. London; New York; New York, NY: Pinter Publishers ; Distributed in the USA and Canada by St. Martin’s Press.
  • Tan, J. (2014). Running out of steam? Manufacturing in Malaysia. Cambridge Journal of Economics, 38, 153–180.
  • Tavares, M. da C. (1997). A retomada da hegemonia norte-americana. In M. da C. Tavares & J. L. Fiori (Eds.), Poder e dinheiro: uma economia política da globalização. Editora Vozes.
  • Tavares, M. da C., & Melin, L. E. (1997). Pós-escrito 1997: a reafirmação da hegemonia norte-americana. In M. da C. Tavares & J. L. Fiori (Eds.), Poder e dinheiro: uma economia política da globalização (pp. 55–86). Editora Vozes.
  • Taylor, L. (1998). Capital market crises: liberalisation, fixed exchange rates and market-driven destabilisation. Cambridge Journal of Economics, 22, 663–676.

No hay comentarios:

Publicar un comentario