Marwil J. Dávila-Fernández
DEPS, USiena
Abstract
Over the past fty years, the United States (US) has experienced a process of structural change characterised by an increase in financial and a decrease in manufacture technical coefficients. In this article, we argue that both processes are intrinsically related. Building on Dávila-Fernández and Punzo (2019) multisectoral approach to financialisation, technical coefficients can be understood as measures of input content per unit of output produced. Using a 15-sector level of aggregation, we revisit the evolution of manufacture content in the US between 1947 and 2015. We proceed by applying time-series cointegration techniques and dynamic panel estimation methods to assess the correspondence between different measures of manufacture and financial content. Our results indicate that there is a negative long-run relationship between both series with financialisation being weakly exogenous and having predictive power over manufacture content. We conclude discussing the role of financial liberalisation, shareholder value orientation, and firm indebtedness to explain how a more financial intensive production technique has displaced manufacture inputs.
Keywords
Financialisation, Deindustrialisation, Input-Output, Cointegration, United States.
Jel Codes
E12; E32; O40;
