Advanced search
Publication Cover
Journal of Post Keynesian Economics Volume 28, 2005 - Issue 2
Submit an article Journal homepage
731
Views
99
CrossRef citations to date
0
Altmetric
Original Article

Shareholder value orientation and the investment-profit puzzle

ENGELBERT STOCKHAMMER Wirtschaftsuniversität Wien, Vienna, Austria
Pages 193-215 | Published online: 10 Dec 2014
 
Sample our Humanities journals, sign in here to start your FREE access for 14 days

Abstract

Shareholders have increased their ability to influence management decisions significantly over the past two decades. This paper proposes an extension of the Post Keynesian theory of the firm proposed by Lavoie (1992) to analyze the effects of this change in shareholder power on investment decisions. This microeconomic analysis is complemented by a Kaleckian macroeconomic model. Shareholder power is found to reduce investment and output, while increasing profits, which is consistent with the stylized facts of the neoliberal era.

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Order Reprints Request Corporate Permissions

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

Request Academic Permissions

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.

Related Research Data

Why Does Business Invest? An Analysis of Industry Accounting Data
Source: Informa UK Limited
An empirical analysis of Minsky regimes in the US economy
Source: Oxford University Press (OUP)
A Fresh Look at the Efficient Market Hypothesis: How the Intellectual History of Finance Encouraged a Real “Fraud-on-The-Market”
Source: Informa UK Limited
The Neoclassical and a Post Keynesian Theory of Investment
Source: Informa UK Limited
The political economy debate on 'financialization' - a macroeconomic perspective
Source: Informa UK Limited
Post-Keynesian Theories of the Firm under Financialization
Source: SAGE Publications
Chapter 20 Human behavior and the efficiency of the financial system
Source: Elsevier
Micro Foundations of Macro Dynamics
Source: Cambridge University Press
An Empirical Note on the Investment Behavior of U.K. Firms, 1960–85
Source: Informa UK Limited
Reconsidering the Investment-Profit Nexus in Finance-Led Economies: an ARDL-Based Approach
Source: Wiley
Asymmetric Information and Keynesian Theories of Investment
Source: Informa UK Limited
Uma introdução ao capitalismo dirigido pelas finanças
Source: (:unav)
Varieties of Keynesian Investment Theories: Further Reflections
Source: Informa UK Limited
Stock Market Risk in a Post Keynesian World
Source: Informa UK Limited
Does Uncertainty Affect Investment Spending
Source: Informa UK Limited
Rethinking the Financialisation of Non-Financial Corporations: A Reappraisal of US Empirical Data
Source: Informa UK Limited
Identifying the “financialization” of the nonfinancial corporation in the U.S. economy: A decomposition of firm-level balance sheets
Source: Informa UK Limited
Neoclassical and Keynesian Approaches to the Theory of Investment
Source: Informa UK Limited
Is a Finance-Led Growth Regime a Viable Alternative to Fordism? A Preliminary Analysis
Source: Informa UK Limited
Does Shareholder Value Orientation or Financial Market Liberalization Slow Down Korean Real Investment
Source: SAGE Publications
Financialisation and Real Investment in the European Union: Beneficial or Prejudicial Effects?
Source: Routledge/Taylor and Francis
The financialisation–offshoring nexus and the capital accumulation of US non-financial firms
Source: HAL CCSD
Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit
Source: Elsevier BV
Finance-dominated Capitalism in Crisis — The Case for a Keynesian New Deal at the European and the Global Level
Source: Palgrave Macmillan UK
Conspicuous Consumption, Inequality and Debt
Source: Wiley
How Long Can You Run—And Where Are You Running?
Source: Informa UK Limited
Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit
Source: Elsevier BV
Financialisation, financial development, and investment: evidence from European non-financial corporations
Source: Oxford University Press (OUP)
Shareholder value and Financialization: consultancy promises, management moves
Source: Informa UK Limited
Comparing Wealth Effects: The Stock Market Versus the Housing Market
Source: National Bureau of Economic Research
Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit
Source: Elsevier BV
Harrodian Instability in Kaleckian Models
Source: Wiley
Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit
Source: Elsevier BV
The investment function: five propositions in response to Professor Gordon
Source: Informa UK Limited
Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit
Source: Elsevier BV
Have Employment Reductions Become Good News for Shareholders? The Effect of Job Loss Announcements on Stock Prices, 1970-97
Source: National Bureau of Economic Research
The historic rise of financial profits in the U.S. economy
Source: Informa UK Limited
FINANCIAL-MARKETS AND THE COMPLEMENTARITY OF ASYMMETRIC INFORMATION AND FUNDAMENTAL UNCERTAINTY
Source: Informa UK Limited
The effects of financialization on investment: evidence from firm-level data for the UK
Source: Oxford University Press (OUP)
The Profit–Investment Nexus in an Era of Financialisation, Globalisation and Monopolisation: A Profit-Centred Perspective
Source: HAL CCSD
Costs and benefits of neoliberalism. A class analysis
Source: Informa UK Limited
Maximizing shareholder value: a new ideology for corporate governance
Source: Informa UK Limited
Financialisation, income distribution and aggregate demand in the USA
Source: Oxford University Press (OUP)
Impact on Financialisation on Accumulation: Evidence from India
Source: Wiley
Models for Investors in Real World Markets
Source: Wiley
Financialization, non-financial corporations and income inequality: the case of France
Source: Oxford University Press (OUP)
Financeirização, empresas não financeiras e o ciclo econômico recente da economia brasileira
Source: Instituto de Economia da Universidade Estadual de Campinas
Relative Price Variability, Inflation Rate Uncertainty, and Postwar Investment of the United States
Source: Informa UK Limited

Linking provided by 

Related research

People also read lists articles that other readers of this article have read.

Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine.

Cited by lists all citing articles based on Crossref citations.
Articles with the Crossref icon will open in a new tab.