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Title: Financialization and Portuguese real investment: a supportive or disruptive relationship?
Authors: Barradas, R.
Lagoa, S.
Keywords: Financialization
Vector Error Correction Model
Issue Date: 2017
Publisher: Routledge/Taylor and Francis
Abstract: The article makes an empirical analysis of the relationship between financialization and real investment by Portuguese nonfinancial corporations from 1979 to 2013. In theory, while financialization leads to a rise in financial investments by nonfinancial corporations and thus deviates funds from real investment, it also intensifies the pressure for financial payments and therefore restricts the funds available for real investment. We estimate an aggregate investment function including control variables (profitability, debt, cost of capital and output growth) and two measures of financialization (financial receipts and financial payments). The study concludes that there is a long-term investment equation, and finds evidence that the process of financialization has hampered real investment largely as a result of financial payments. The article also finds that profitability and debt are both detrimental to real investment.
Peer reviewed: yes
DOI: 10.1080/01603477.2017.1286940
ISSN: 0160-3477
Accession number: WOS:000415950300006
Appears in Collections:DINÂMIA'CET-RI - Artigo em revista científica internacional com arbitragem científica

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