Competition & Change

Stockhammer, Engelbert

doi: 10.1177/10245294261443733pmid: N/A

The paper discusses the historical development of the debate on financialization supported by bibliometric analysis. There are several origins of the concept of financialisation in the 1990s, and in the early 2000s, this consolidates in a transdisciplinary project: an attempt to create a critical conversation across academic disciplines about the impact of finance on the economy and society. This was driven by the team of CRESC by organising workshops and special issues, involving critical business studies, constructivist approaches to the household and heterodox macroeconomics. This created the basis for the success of the concept and, since the global financial crisis, enabled an explosive rise in studies on financialisation. But with success also came a fragmentation of the debate and its disintegration along disciplinary lines. Thus, research on financialization today is published in more prestigious journals, but it has decoupled from the core financialisation debate of the 2000s.

Bühlmann, Felix; Benquet, Marlène; Bourgeron, Théo

doi: 10.1177/10245294261458504pmid: N/A

How do coalitions within financial sectors lead to reconfigurations in political regimes? We investigate this issue by looking at how the transformation of global wealth chains has led to the reconfiguration of Switzerland’s social blocs. To highlight the political effects of the restructuring of financial circuits, we combine a multiple correspondence analysis of the positions of Swiss parties and interest groups with a qualitative analysis of the dynamics of Swiss financial policies. We show how the Swiss financial sector is split into two sets of actors: (1) large banks, who seek to maintain access to international markets by complying with international regulation, and (2) smaller wealth managers and banks, who try to maintain the tax avoidance model. We contend that this split has resulted in a division within Swiss politics, between the traditional centre-right camp, and a new right-wing camp.

Marenco, Matteo

doi: 10.1177/10245294251405003pmid: N/A

The digitalisation of work is having far-reaching consequences for welfare states. In particular, the social protection implications of platform work have been heatedly debated. The question of whether platform workers should qualify as employees or freelancers has been especially politically salient in that the employment status largely determines access to social protection. Surprisingly, comparative welfare state scholarship has remained silent on the matter. In a context of marked politicisation of platform work, how did government partisanship influence legislative responses to platform work? What do different legislations imply for platform workers’ social protection? Drawing on literature on government ideology in social policymaking, I address these questions by comparing the politics of platform workers’ social protection in France and Italy, which present similar welfare state architectures and labour market structures. Methodologically, I rely on 22 semi-structured interviews with policymakers and experts involved in legislative processes on the employment status. I triangulate interview data with policy documents and newspaper articles. My findings show that partisanship matters through government ideology in the regulation of platform workers’ social protection. While the French government followed a ‘liberalising’ approach, the overall Italian trajectory presented more ‘interventionist’ traits. The centrality of government ideology, developed within party structures quite regardless of voter preferences, calls for a more extensive consideration of agential factors driving political parties and governments. More broadly, this paper also sheds light on how welfare politics is re-discussing the foundations of welfare states at a time when digitalisation is rapidly changing the world of work.

Mayer, Thomas; van der Zwan, Natascha

doi: 10.1177/10245294261462226pmid: N/A

Following policy changes associated with privatization and financialization, characteristics of funded occupational pension schemes have changed, shifting financial risk to beneficiaries. Scholarship of pension policy, however, has yet to take into the account the implications of these risk shifts for pension governance. Existing research on pension governance has focused almost exclusively on representation within pension funds along the lines of employers and employees (often via unions or works councils). Our paper asks: Does financialization give rise to new claims for representation by those experiencing new financial risks? We examine how pensioners demanded representation on occupational pension fund boards in Austria and the Netherlands, with varying levels of success. Based on our contextualized comparison of the two cases, we show that increasing financial risk for pensioners was a major driver behind pensioner demands for representation on pension fund boards in both countries. To explain Austrian pensioners’ limited success in gaining de facto decision-making power vis-à-vis more consequential forms of representation in the Netherlands, we turn to the political context of democratic corporatism in both countries. In particular, we argue that shifting insider-outsider dynamics within national corporatist structures explain the two different historical trajectories. Our paper shows that stakeholder representation in pension governance should be considered a dynamic feature of contemporary pension politics.

Maile, Felix; Staritz, Cornelia

doi: 10.1177/10245294261437984pmid: N/A

Global value chain (GVC) analysis examines the distribution of value between lead firms and suppliers but overlooks profit leakage to actors outside GVCs, especially financial markets. We address this gap by integrating GVC analysis with the corporate financialization literature, examining value capture between shareholders, lead firms, and suppliers. Using S&P Capital IQ data, we analyze lead firms’ financialization of objectives, investments, operations, and value capture across four GVCs (apparel, automotive, copper, and coffee/cocoa) from 1993 to 2022. We show that GVCs serve lead firms as a “source of value” by lowering sourcing costs to increase profit margins and shareholder returns, and as a “source of liquidity,” extending supplier payment terms that enhance working capital. Overall, shareholders emerge as the main beneficiaries of GVCs. While issuing equity plays a minor role in financing lead firms, these firms sustain stock markets through large shareholder payouts, funded through the profits generated in GVCs.

Ertürk, Ismail; Bansal, Raghu

doi: 10.1177/10245294251413828pmid: N/A

In this paper, we develop a theoretical framework called ‘financialised valuation dynamics’, situated within debates on the power of finance, drawing on the conceptual and empirical contributions of early financialisation studies on firm competition in stock markets and the conjunctural nature of valuations. We analyse the 2023 U.S. banking crisis using our theoretical framework to demonstrate that the regulators’ ex-post explanation of the crisis as interest rate risk mismanagement and the concentration of uninsured deposits at the three failed banks ignores fundamental sources of financial instability that central banks have contributed to through monetary policy. We argue, through empirical analysis, that financialised valuation dynamics exercise taxonomic power and narrativise the business models of the three failed banks, which had led them to outperform other U.S. banks in stock market valuation before their failure. Financialised valuation dynamics depicted the three failed banks as ‘niche’ banks serving disruptive technology firms, which were conjuncturally regarded as the future growth engines of capitalism following the COVID-19 pandemic.

Casaú, Miguel A.; Gracia Santos, Manuel; Sánchez Díez, Ángeles

doi: 10.1177/10245294261443734pmid: N/A

This paper investigates the drivers of Spanish deindustrialization between 1995 and 2018 within a context of increasing international productive fragmentation. Building on the subsystem approach, we extend the analysis to a global Multi-Regional Input-Output (MRIO) framework in order to capture both domestic and international inputs embodied in manufacturing production. We combine this perspective with a structural decomposition analysis (SDA) to disentangle the relative contribution of internal factors (productivity, income, and investment) and external factors (outsourcing and international trade) with particular emphasis on Spain’s integration into global value chains (GVCs) and the European Union. Findings show that the period before the Great Financial Crisis saw marked deindustrialization, while the post-2010 phase showed a relative reversal, mainly due to outsourcing and export dynamics. While internal factors were largely responsible for these trends, external drivers (especially substitution of domestic inputs by imports and the reconfiguration of regional production) also played an increasing role. Heterogeneity among sectors also proved significant, with traditional and GVC-integrated sectors found to have been differently affected. By integrating internal and external drivers within a unified global subsystem framework, the paper contributes to current debates on industrial policy and productive autonomy in advanced economies exposed to GVC dynamics.

Lang, Juliane

doi: 10.1177/10245294261426419pmid: N/A

Global value chain (GVC) analysis gives insights into how powerful lead firms coordinate inter-firm relations in global industries. Yet, GVC research so far has predominantly focused on theorizing power exercised by buyer lead firms—those which select suppliers, place orders, or set requirements. In this paper, I instead advance the theorization of what I argue to constitute a particular form of power exercised by input supplier firms in agri-food industries. Focusing on feed suppliers, I examine how in the Chilean farmed salmon value chain, suppliers of inputs derive power from intangible assets like feed technologies, digital tools, knowledge about optimal input use, and control over aggregated farm-level data. I show how these intangible assets feed into a sort of bipolar governance structure, in which two power centers at the retail and input node reinforce each other. I term this phenomenon a “double-lead firm dynamic” and suggest this dynamic may be a core driver for contemporary value squeezes present in many agri-food GVCs.

Li, Chen; Summers, Tim; Miao, Chunzi

doi: 10.1177/10245294261448606pmid: N/A

This article examines the innovative financial connectivity schemes in Hong Kong and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) in southern China to understand China’s regionalized financial statecraft and their implications for the global financial order. While the existing literature tends to depict a coherent “state-capitalist” China exercising offensive financial statecraft to contest the neoliberal global financial order, we highlight the domestic institutional hybridity and spatial dynamics of China’s financial statecraft. Bridging the subnational, national, and global levels of analyses, we argue that these financial connectivity schemes serve as a form of institutional bridging and defensive financial statecraft for China to co-opt and hedge against the US-led global financial order, and to reconfigure its financial sovereignty in cross-border governance. Embedded in China’s domestic institutional hybridity and territorial dynamics, such financial statecraft plays out as a process of cross-border/boundary market-making that aligns Hong Kong closer to China’s national strategies, while maintaining its international role.

Horn, Jonas L.

doi: 10.1177/10245294261454436pmid: N/A

What conditions hinder the success of business’s attempts to shape responses to economic crisis? During both the global financial crisis and the COVID-19 pandemic, the German government drafted growth packages. Twice the automotive industry aimed for the inclusion of a vehicle scrappage program, investing considerable effort into ensuring the measure was implemented. Yet, only one of these attempts was successful. To explain this puzzling outcome, I apply business power theory within a comparative process-tracing design, arguing that in contexts of high issue salience, business’s success depends on its ability to control the framing of an issue and win framing contests. I find that this ability was constrained in 2020. The study contributes not only to the literature on business power but also to the broader understanding of who governs in times of crisis, highlighting that taking business and its power into account is crucial to understand crisis response.