New South African Review 1. Anthony Butler
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Название: New South African Review 1
Автор: Anthony Butler
Издательство: Ingram
Жанр: Зарубежная деловая литература
isbn: 9781868147915
isbn:
Figure 9 shows calculations for trends of net acquisitions of financial assets by sector calculated from the SARB flow of funds data. The first stark difference between figure 8 and figure 9 is the scale of the different charts. The Y-axis on figure 8 goes up to R140 billion and that of figure 9 to R450 billion. The next stark difference is that every sector in figure 9, except for general government, had large and increasing net acquisition of financial assets, whereas in figure 8 we noted that it was only government, household and corporate business enterprises that showed large increases in net capital stock. There was rapid growth in acquisition of financial assets in all the financial categories. The other monetary institutions category, which includes the commercial banks, had huge growth in acquisition of financial assets, which nearly tripled from just over R150 billion in 2003 to nearly R430 billion in 2007.
Figure 8: Credit extension and investment as percentages of GDP
Source: calculated using SARB data
Figure 9: Capital allocated to capital formation by sector, Rbillions
Source: calculated from SARB flow of funds data
Household net capital formation in 2007 at around R30 billion was a fraction of their net acquisitions of financial assets, which more or less doubled to R200 billion in 2007 from about R100 billion in 2005. The trend in acquisition of financial assets by corporate business enterprises increased until the financial crisis (and the dotcom crisis) in 2001 and then declined until 2005. However, it had a sudden surge and by 2007 had grown, from the 2001 peak of about R100 billion, to over R170 billion.
Figure 10 highlights an important fact about corporate business’ net acquisition of financial assets relative to net fixed capital formation for the period for which we have SARB flow of funds data (1993 to 2007): corporate business enterprise net capital formation (that is, gross capital formation less depreciation) was lower than net capital formation for all years between 1994 and 2007 except for 2004 and 2005. Corporate saving was low for the period and turned negative in 2006–7. Many of the studies of financialisation in the US economy focus on the increasing financialisation of nonfinancial corporations (NFCs). One aspect of this financialisation is the increased share of income and profits of NFCs from involvement in financial markets and investment in financial assets. The flow of funds data on use of capital by corporate business enterprises in South Africa seems to support the notion that there has been financialisation of NFCs in South Africa.
Figure 10: Capital allocated to financial assets, Rbillions
Source: calculated from SARB flow of funds data
A number of recent studies show that financialisation of nonfinancial corporations was associated with lower levels of investment by nonfinancial corporations. This literature focuses on developed countries, particularly the US. Aglietta and Breton (2001) argue that the greater influence of financial markets on nonfinancial corporations and their demands for higher returns influenced executives of nonfinancial corporations to increase their dividend payments and to use share buybacks to raise share prices. They were left with less capital for investment.
Figure 11: The main sources and uses of capital in corporate business enterprises, R millions
Source: calculated from SARB flow of funds data
As Crotty (2002) explains, nonfinancial corporations have increased the sizes of their financial subsidiaries and have become involved in more financial speculation. Duménil and Lévy (2004) show that interest and dividend payments from nonfinancial corporations to financial markets increased: nonfinancial corporations, therefore, had less capital to invest in their own activities. Stockhammer (2004) uses regression analysis to show that financialisation is associated with lower levels of capital accumulation. Froud et al (2000) show the extent to which executives of nonfinancial corporations have become focused on the concerns of the financial markets for short-term high returns, using case studies of global corporations to show how this sensitivity to financial markets has created dysfunctional behaviour in large corporations, and arguing that the narrative provided by CEOs of large corporations to financial markets is not supported by examination of the financial statements of those companies. Orhangazi (2007) uses firm level data in the US to show a negative relationship between real investment and financialisation. He argues that financialisation of nonfinancial corporations may have caused a change in the incentives of management that caused them to direct capital towards financial investments.
Much more research is required to understand the impact of financialisation of NFCs on the South African economy and on developing countries in general. Given the available evidence I argue that the largest South African corporations have become more sensitive to the demands of the financial sector, particularly the shareholder value movement. Recent corporate restructuring and the content of annual reports of these giant corporations are indications of this sensitivity. Lazonick and O’sullivan (2000) argue that the predominance of the shareholder value approach to corporate governance has been accompanied by a shift from patient to impatient capital – in other words, the increased influence of financiers and the shareholder value movement over corporate executives has caused a shift in management behaviour. Investors and management are less concerned with building and nurturing businesses over a long period of time, and have become focused on short-term returns. This behaviour is even more marked where big business has moved capital out of South Africa and increased its efforts to internationalise. Crotty (2002) says that this shift to impatient capital has led to management treating their subsidiaries not as long-term investments but as part of portfolios of assets. We have seen former South African giant corporations unload a huge number of South African businesses that they have decided are not part of their core businesses and increase their investments abroad. Froud et al (2007) argue that this increased focus on short-term financial returns in NFCs is bad for labour because decreasing employment is good for increasing profits in the short-run even if losing experienced workers may be detrimental to these NFCs in the longrun. South Africa requires СКАЧАТЬ