The Open UniversitySkip to content

Financialisation, financial development, and investment: evidence from European non-financial corporations

Tori, Daniele and Onaran, Ozlem (2019). Financialisation, financial development, and investment: evidence from European non-financial corporations. Socio-Economic Review (Early Access).

Full text available as:
Full text not publicly available (Accepted Manuscript)
Due to publisher licensing restrictions, this file is not available for public download until 21 December 2020
Click here to request a copy from the OU Author.
DOI (Digital Object Identifier) Link:
Google Scholar: Look up in Google Scholar


This article provides estimations of the effects of different financial channels on physical investment in Europe using the balance sheets of publicly listed non-financial corporations (NFCs) for the period 1995-2015. The evidence suggests that both financial payments and financial income have an adverse effect on investment in fixed assets. The negative impacts of increasing financial income are non-linear with respect to company size: they crowd out investment in large companies, and have a positive effect on the investment of relatively smaller companies. Similar to the recent literature on finance-growth nexus, we find an inverted U-shaped relationship between financial development and companies’ investment. However, in contrast to the existing literature, we also find that a higher degree of financial development in the country is associated with a stronger negative effect of financial income on investment.

Item Type: Journal Item
Keywords: financialisation; financial development; non-financial corporations; fixed investment; Europe
Academic Unit/School: Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
Faculty of Business and Law (FBL) > Business
Faculty of Business and Law (FBL)
Research Group: Innovation, Knowledge & Development research centre (IKD)
Related URLs:
Item ID: 58130
Depositing User: Daniele Tori
Date Deposited: 12 Dec 2018 09:18
Last Modified: 16 Nov 2019 03:23
Share this page:


Altmetrics from Altmetric

Citations from Dimensions

Actions (login may be required)

Policies | Disclaimer

© The Open University   contact the OU