Impacts of Financialization on Innovation: a study for Brazilian nonfinancial corporation in the period 2010-2018
Abstract
At the business level, financialization can be expressed by the principle of maximizing shareholder value, increasing financial activities and indebtedness. By directing resources to these three spheres, financialization can reduce funds that could be used to finance innovation. This paper’s goal is to study the impacts of financialization on the innovations of publicly traded non-financial companies in Brazil between 2010 and 2018. For this purpose, a dynamic panel was estimated using the GMM-System using accounting and financial data. The results showed that the maximization of shareholder value and the increase in corporate indebtedness hampered innovation of these companies.
Downloads
References
Aglietta, M. (2000) “Shareholder value and corporate governance: some tricky questions” Economy and Society, 29(1), p. 146-159. DOI: 10.1080/030851400360596
Arellano, M. e Bover, O. (1995) “Another look at the instrumental variable estimation of error-components models” Journal of Econometrics, 68 (1), p. 29-51. DOI: 10.1016/0304-4076(94)01642-D
Atílio, l. A.; Cavalcante, A. (2019) “Empresas não-financeiras e o Impacto da Estratégia Maximizing Shareholder Value sobre o Emprego no Brasil” Análise Econômica, p. 175-209. DOI: 10.22456/2176-5456.74059
Audretsch, D.; Hafenstein, M.; Kritikos, A.; Schiersch, A. (2018) “Firm size and innovation in the service sector” IZA Discussion Papers, n.12035, 46p. DOI: 10.2139/ssrn.3299312
Auvray, T.; Colletis, G.; Lavigne, S.; Montalban, M.; Morin, F.; Raduriau. G. (2007) “La financiarisation des stratégies: transferts de risque, liquidité, propriété et controle”, GRES Working Paper, n.2007-09, 53p.
Binz, H. L.; Czarnitzki, D. (2008) “R&D investment and financing constraints of small and medium-sized firms”, ZEW Discussion Paper, n.08-047, 28p. DOI: 10.1007/s11187-009-9189-3
Blair, M. M. (2003) “Shareholder value, corporate governance, and corporate performance”, In: P. K. Cornelius e B. Kogut (eds.). Corporate governance and capital flows in global economy, p. 53-82. DOI: 10.1016/S0304-4076(98)00009-8
Blundell, R.; Bond, S. (1998) “Initial conditions and moment restrictions in dynamic panel data models”, Journal of Econometrics, 87(1), p. 115-143. DOI: 10.1016/S0304-4076(98)00009-8
Boyer, R. (2000) “Is a finance-led growth regime a viable alternative to Fordism? a preliminary analysis”, Economy and Society, 29(1), p. 111-145. DOI: 10.1080/030851400360587
Boyer, R. (2004 [2009]) Teoria da Regulação: os fundamentos. São Paulo: Estação Liberdade.
Canepa, A.; Stoneman, P. (2008) “Financial constraints to innovation in the UK: evidence from CIS2 and CIS3”, Oxford Economic Papers, 60(4), p. 711-730. DOI: 10.1093/oep/gpm044
Chesnais, F. (1994 [1996]) A Mundialização do Capital, São Paulo: Xamã VM Editora.
Chesnais, F. (2004 [2005]) “O Capital Portador de Juros: acumulação, internacionalização, efeitos econômicos e políticos”, In: F. Chesnais (ed.) A finança mundializada, São Paulo: Boitempo, p. 35-67.
Corrado, C.; Haskel, J. Jona-Lasinio, C.; Iommi, M. (2012) “Intangible capital and growth in advanced economies: measurement methods and comparative results”, IZA Discussion Papers, n.6733, 56p. DOI: 10.2139/ssrn.2114913
Davidson, P. (2007). John Maynard Keynes. London, Palgrave Macmillan.
Davis, L. E. (2013) “Financialization and the nonfinancial corporation: an investigation of firm-level investment behavior in the U.S., 1971-2011”, UMASS Working Paper, n.2013-08, 25p. DOI: 10.7275/4744897
Demir, F. (2009) “Financial liberalization, private investment and portfolio choice: Financialization of real sectors in emerging markets”, Journal of Development Economics, 88(2), p. 314-324. DOI: 10.1016/j.jdeveco.2008.04.002
Dequech, D. (2011) “Uncertainty: a typology and refinements of existing concepts”, Journal of Economic Issues, 45(3), p. 621-640. DOI: 10.2753/JEI0021-3624450306
Dosi, G. (1988) “Sources, procedures, and microeconomic effects of innovation”, Journal of Economic Literature, 26(3), p. 1120-1171.
Dosi, G. (1982) “Technological paradigms and technological trajectories: a suggested interpretation of the determinants and directions of technical change”, Research Policy, 11(3), 147-162.
Dosi, G.; Revest, V.; Sapio, A. (2016) “Financial regimes, financialization patterns and industrial performances: preliminary remarks”, Revue d'économie Industrielle, n.154, p.63-96. DOI: 10.4000/rei.6329
Epstein, G. A. (2005) “Introduction: financialization and the world economy” In: Epstein, G. A.(ed.) Financialization and the World Economy. Edward Elgar Publishing, p.3-16.
Fagerberg, J.; Verspagen, B. (2003) “lnnovation, growth and economic development: why some countries succeed and others don't” First Globelics Conference: Innovation Systems and development Strategies for the Third Millenium, Rio de Janeiro.
Farinha, L.; Prego, P. (2013) “Investimento e situação financeira das empresas: evidência recente”, Relatório de Estabilidade Financeira, p.107-128.
Fonseca, C. V. C.; Silveira, R. L. F e Hiratuka, C. (2019) “The Influence of Heterogeneous on Company Strategies in Emerging Countries: evidence of Brazil”, Competition and Change, 23(5), p. 460-480. DOI: 10.1177/1024529419871261
Freeman, C. (1982) The Economics of Industrial Innovation. Londres: Pinter Publishers.
Freeman, C. (1995) “The ‘National System of Innovation’ in historical perspective”. Cambridge Journal of Economics, 19(1), p. 5-24.
Freeman, J.; Engel, J. S. (2007) “Models of innovation: start-ups and mature corporations”, California Management Review, 50(1), p. 94-119. DOI: 10.2307/41166418
Freeman, C.; Soete, L. (1974[2008]) A Economia da inovação Industrial. Campinas: Editora Unicamp.
Geronikolaou, G; Papachristou, G. A. (2012) “Venture capital and innovation in Europe”, Modern Economy, 3 (4), p. 454-459. DOI: 10.4236/me.2012.34058
Gleadle, P.; Parris, S.; Shipman, A.; Simonetti, R. (2012) “Financialisation as an Enabler or Inhibitor of Innovation? The Case of UK Biotech”, FINNOV Discussion Paper, n.8, 24p.
Grossman, G.; Helpman, E. (1991) Innovation and Growth in the Global Economy. Cambridge, MA: MIT Press.
Guimarães, E. (2006) “Políticas de Inovação: Financiamento e Incentivos”, IPEA Texto para Discussão, n. 1212.
Hall, B. H.; Lerner, J. (2010) “The financing of R&D and innovation”, In: B. H. Hall e N. Rosenberg (eds.) Handbook of the Economics of Innovation, Oxford, Elsevier, p. 609-639.
Hansmann, H.; Kraakman, R. (2000) “The end of history for corporate law”. Law and Economics Working Paper, n.13, 36p.
Hayes, M. (2006) The Economics of Keynes: a new guide to the General Theory. Cheltenham, Edward Elgar.
Jaconis, S. (2014) “Converging and diverging trends in Europe in the presence of Money Manager capitalism: different analytical approaches”, In: T. NATOLI; G. NUCERA e C. PELAIA (eds.). Aspetti istituzionali della risposta ai disastri nel sistema delle Nazioni Unite, Napoli: Editoriale Scientifica, p. 783-792.
Jensen, M. C. (1986) “Agency costs of free cash flow, corporate finance, and takeovers”, The American Economic Review, 76(2), p. 323-329.
Jibril, H.; Kaltenbrunner, A.; Kesidou, E. (2018) “Financialisation and innovation in emerging economies: evidence from Brazil”, FMM Working Paper, n.27, 35p.
Kahn, M.; Melo, L. M. de; Matos, M.G. P. de (2020) “The financing of innovation”, In: M. Kahn; L. M. de Melo e M. G. P. de Melo (eds.) Financing Innovation: BRICS National Systems of Innovation. Taylor & Francis, p. 1-20.
Kaiserfeld, T. (2005). “A review of theories of invention and innovation”, CESIS Working Paper ,n.47(1) , 18p.
Karwowski, E.; Stockhammer, E (2017) “Financialization in emerging economies: a systematic overview and comparison with anglo-saxon economies”, Economic and Political Studies, 5(1), p. 60-86. DOI: 10.1080/20954816.2016.1274520
Krippner, G. R. (2005) “The financialization of the American economy”, Socio-economic Review, 3(2), p. 173-208. DOI: 10.1093/SER/mwi008
Lazonick, W. (2010) “Innovative business models and varieties of capitalism: financialization of the US corporation”, The Business History Review, 84(4), p. 675-702. DOI: 10.1017/S0007680500001987
Lazonick, W. (2011) “From innovation to financialization: how shareholder value ideology is destroying the US economy”, In: M. H. Wolfson e G. A. Epstein (eds.) The Handbook of the Political Economy of Financial Crises, New York, Oxford University Press, p. 491-511.
Lazonick, W. (2015) “The financialization of the US corporation: What has been lost, and how it can be regained” Seattle University Law Review, 36(2), p. 857-909.
Lazonick, W.; O'Sullivan, M. (2000) “Maximizing shareholder value: a new ideology for corporate governance”, Economy and Society, 29(1), p. 13-35. DOI: 10.1057/9780230523739_2
Lee, Y. S; Kim, H. S.; Joo, S. H. (2020) “Financialization and innovation short-termism in OECD Countries”, Review of Radical Political Economics, 52(2), p. 259-286. DOI: 10.1177/0486613419886409
Levin, R. C. (1988) “Appropriability, R&D Spending, and Technological Performance”, American Economic Review,78(2), p. 424-428.
Lima, M. B.; Silva, L. B. (1996) “Custos irreversíveis, Leis de Custos e Gerência de Projetos – a viabilidade de um processo de mudança”, 3º Congresso Brasileiro de Custos, Curitiba, Disponível em https://anaiscbc.emnuvens.com.br/anais/article/view/3393.
Lucas, R. E. Jr. (1988) “On the mechanics of economic development”, Journal of Monetary Economics, 22(1),. p. 3-42.
Maia, J. L.; Serio, L. C. D. (2019) Financeirização: Impactos Sobre as Empresas, Estratégias e Inovações. São Paulo: Paco Editorial.
Martins, I.; Miranda, B. P. J.; Matos, C. M.; Missio, F. J. (2022) “Efeitos da financeirização sobre o investimento produtivo: evidências para as empresas brasileiras não-financeiras de capital aberto (2010 a 2016)”, Revista de Economia Contemporânea, 26, p. 1 - 24. DOI: 10.1590/198055272604
Mazzucato, M. (2014) O Estado Empreendedor: desmascarando o mito do setor público vs. setor privado. São Paulo: Portfolio Penguin.
Mazzucato, M.; Tancioni, M. (2012) “R&D, patents and stock return volatility”, Journal of Evolutionary Economics, 22, p. 811-832. DOI: 10.1007/978-3-642-35125-9_15
Melo, L. M. (2009) “Financiamento à Inovação no Brasil: análise da aplicação dos recursos do Fundo Nacional de Desenvolvimento Científico e Tecnológico (FNDCT) e da Financiadora de Estudos e Projetos (FINEP) de 1967 a 2006”, Revista Brasileira de Inovação, 8(1), p. 87-120. DOI: 10.20396/rbi.v8i1.8648976
Miranda, B. P. J.; Matos, C. M. (2016) “Financeirização e investimento produtivo: uma análise das empresas não-financeiras do Novo Mercado da Bovespa”, Revista Econômica, 18(2), p. 1-29.
Nelson, R. R.; Winter, S. G. (1977) “In search of a useful theory of innovation”, Research Policy, 6(1), p. 36-76.
OCDE (2005) Manual de Oslo: proposta de diretrizes para coleta e interpretação de dado sobre inovação tecnológica, 3 ed.
O'Sullivan, M. (2005) “Finance and Innovation”, In: J. Fagerberg e D. C. Mowery (eds) The Oxford Handbook of Innovation, p. 240-265.
Orhangazi, Ö. (2008) “Financialisation and capital accumulation in the non-financial corporate sector: a theoretical and empirical investigation on the US economy: 1973–2003”, Cambridge Journal of Economics, 32(6), p. 863-886. DOI: 10.1093/cje/ben009
Roodman, D. (2009) “How to do xtabond2: an introduction to difference and system GMM in Stata”, The Stata Journal, 9(1), p. 86-136.
Schumpeter, J. A. (1911[1982]). Teoria do Desenvolvimento Econômico: uma investigação sobre lucros, capital, crédito, juro e o ciclo econômico. São Paulo: Abril Cultural.
Seo, H. J.; Kim, H.S e Kim, Y. C. (2012) “Financialization and the Slowdown in Korea Firms´R&D Investment” Asian Economics Paper, 11(3), p. 35-49. DOI: 10.1162/ASEP_a_00160
Stockhammer, E. (2010) “Financialization and the global economy”. PERI Working Paper Series, n.240, 18p.
Stockhammer, E. (2012) “Financialization, income distribution and the crisis”, Investigación Económica, 71(279), p. 39-70.
Syrneonidis, G. (1996) “Innovation, firm size and market structure: Schumpeterian hypotheses and some new themes”, OECD Working Paper, n.161, 43p. DOI: 10.1787/18151973
Tori, D; Onaran, Ö. (2018) “The effects of financialization on investment: evidence from firm-level data for the UK”, Cambridge Journal of Economics, 42(5), p. 1393-1416. DOI: 10.1093/cje/bex085
Vallim, R. B. (2014) O Financiamento à Inovação nas Empresas no Contexto do Sistema Nacional de Inovação Brasileiro. 170 f. Dissertação (Mestrado em Economia) –Universidade Federal do Rio de Janeiro, Rio de Janeiro, 2014.
Viotti, E. B.; Baessa, A. R.; Koeller, P. (2005) “Perfil da inovação na indústria brasileira: uma comparação internacional” In: J. A. de Negri e M. S. Salerno (eds.) Inovações, padrões tecnológicos e desempenho das firmas industriais brasileiras, Brasília: IPEA, p. 653-687.
Wooldridge, J. (2015) Introductory Econometrics: a modern approach. Ohio, Cengage Learning.
Copyright (c) 2024 Jamille Limeira Bittencourt, Bernardo Pádua Jardim de Miranda, Cirlene Maria de Matos
This work is licensed under a Creative Commons Attribution 4.0 International License.
- Authors keep copyrights and concede to the Journal the right to the first publication, with the paper simultaneously licenced under the Creative Commons Attribution 4.0 International License which allows recognised author and journal work sharing.
- Authors are authorized to assume additional contracts separately, for non-exclusive versions of the paper published in this journal (e.g.: publish in an instituional repository or as a book chapter) with the recogntion of authorship and initial publication in this journal.
- Authors are allowed (and are estimulated) to publish and distribute their work online (e.g.: in institutional repositories or at their personal websites) at any point before or during the editorial process, once this may generate productive alterations on the paper, as well as increse the factor of impact and quotation of the published paper (please, see Free Access Effect)
