The Rise of Corporate Net Lending Among G7 Countries: A Firm-Level Analysis

Villani, Davide (2021). The Rise of Corporate Net Lending Among G7 Countries: A Firm-Level Analysis. Review of Political Economy, 33(2) pp. 212–235.



In recent decades, corporate net lending has been increasing in several developed countries. This paper discusses the impact of financialisation and income distribution on the level of net lending of listed non-financial corporations in G7 countries. We argue that financialisation affects the level of corporate net lending through firms` re-organisation towards a model of accumulation based on the maximisation of ‘shareholder value’ and through its negative impact on investment. Moreover, the reduction in the wage share can increase corporate capacity for liquidity accumulation, thus increasing the gap between corporate savings and investment, contributing to the rise in net lending. We test our hypotheses using panel data of publicly listed non-financial corporations for the period 1990–2015. According to our findings the process of financialisation has a positive impact on the level of net lending after 2001, while the wage share at the firm level has a strong negative impact on the level of net lending throughout the whole period.

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  • Item ORO ID
  • 74817
  • Item Type
  • Journal Item
  • ISSN
  • 0953-8259
  • Keywords
  • Corporate net lending; financialisation; functional income distribution; firm-level analysis
  • Academic Unit or School
  • Faculty of Business and Law (FBL)
  • Copyright Holders
  • © 2021 Informa UK Limited, trading as Taylor & Francis Group
  • Related URLs
  • Depositing User
  • Davide Villani