Financialisation and investment behaviour among non-financial corporations in Brazil since the global crisis

Abstract

Over the past few decades, the world has seen a shift towards finance-driven globalisation and financialised investment strategies. At the corporate level, the shift towards such strategies has been associated with the so-called shareholder primacy, along with the fragmentation of productive processes in global value chains and a refocusing of activities towards “core business”. This chapter examines the financialisation of corporate strategies and recent investment patterns in Brazil. It will show that Brazil’s growing integration in global financial markets, followed by financial shocks and associated macroeconomic instability, has been a critical factor behind financialised practices, including carry trade activities. Against this backdrop, corporate investment as a proportion of total capital stock has declined since the global crisis despite the rapid increase in corporate indebtedness, to which natural resource-based industries have been the largest contributors.