Corporate financialisation in South Africa: From investment strike to housing bubble

No PKWP1708, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: This article reveals the processes of financialisation in the South African economy by tracing the sources and destinations of NFCs' liquidity. The paper argues that rather than the volume of NFCs' financial investment, the composition of financial assets is crucial to assess corporate financialisation in the country. Non-financial businesses in South Africa fundamentally transformed their investment behaviour during the 1990s, shifting from more productive uses such as trade credit towards highly liquid and potentially innovative (and therefore risky) financial investment. Following the direction of financial flows the article shows that – fuelled by foreign capital inflows – companies' financial operations contributed to the price inflation in South African property markets.

Keywords: financialisation; emerging markets; financial instability; asset price volatility; heterodox economics (search for similar items in EconPapers)
JEL-codes: B50 F30 F34 G01 G12 G15 (search for similar items in EconPapers)
Pages: 30
Date: 2017-07
New Economics Papers: this item is included in nep-cfn and nep-hme
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https://www.postkeynesian.net/downloads/working-papers/PKWP1708.pdf First version, 2017 (application/pdf)

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Working Paper: Corporate financialisation in South Africa: From investment strike to housing bubble (2017)
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