Financialisation of NFCs, globalisation and growth

This chapter provides a review of some contributions, both mainstream and heterodox, that analyse the portfolio management and investment decisions in big corporations, seeking to determine how they might play a major role in producing growing liquidity holdings and financialisation of NFCs, and how they can be influenced by the new opportunities created by the free movements of capital and the economic dynamics of the emerging countries. Then, starting from the critical analysis carried out in the previous chapters, an analytical framework is proposed in which the growing financialisation of big corporations, interacting with financial globalisation, can play a major role in timing the rhythms of real investment, at least in a part of the world economic system. Furthermore, it is shown how, besides the rates of return, the liquidity degree of the assets can also be a very important determinant in corporations’ portfolio choices, in close connection with business fluctuations. Finally, a conceptual scheme for interpretation and a mathematical model is proposed to explain how the tendency in developed countries to place growing shares of social surplus in speculative financial channels can contribute to their long-term real stagnation.