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

Abstract

This article reveals the processes of financialisation in the South African economy by tracing the sources and destinations of non-financial corporations' (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 companies' financial operationsfuelled by foreign capital inflowsare linked to the price inflation in South African property markets.

Financial citizenship and shadow banking in Pakistan: a study of two deposit-taking microfinance banks

“…Jakab and Kumhof 2015) the intermediation model is no longer a core part of the banking system in many advanced capitalist economies. But owing to asymmetries in the endogeneity of money, intermediation models -in which banks must actively manage deposits -retain relevance for developing capitalist economies (e.g Karwowski 2018).…”

Financialization as a New Regime of Accumulation: Business, Apartheid, and the Neoliberal Transition

“…The proceeds of these sales were placed in the South African commercial banks, which have leveraged these reserves to issue mortgage credit to households and underwrite debt fuelled consumption, thereby contributing to price inflation in the real estate markets. 84 In this sense, the shift away from productive investment in industries such as manufacturing has increased financial fragility in the South African economy.…”

Centring labour in financialization

“…Developments in the country have inarguably been profoundly shaped by their intersections with patterns of financial accumulation on a global scale. A number of previous authors have analyzed these developments in terms of 'financialization' (see Ashman et al 2011;Bond 2013;Karwowski et al 2018). While these studies have generated important insights, there are nonetheless arguably some areas, particularly around the uneven nature of the growth of financial profits and spread of financial logics, where the kinds of questions raised by the Marxian approach developed in the previous section are particularly helpful.…”

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