Abstract
This paper investigates the financialization of regions in the European Union. It zooms in on the regional level and provides and systemic and macrostructural analysis of the factors that account an increase in finance and insurance activities. Theoretically, the argument highlights the crucial importance of various forms of indebtedness as the social, economic and political relationship that constitutes financialization processes. Empirically, the paper stresses the sub-national dimension and thus contributes to fill an important, yet largely underappreciated gap in the political economy of finance. In order to fully grasp the extent to which financialization has transformed capitalism throughout the last three decades, it seems indispensable to include regions into the analysis. By injecting geography into the political economic debate, the paper might animate future research and a renewed discussion on regional specificities.
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Notes
Industry sectors are according the official Eurostat classification of NACE Rev. 2 (European Communities 2008) with abbreviations in parentheses. The analysis includes 18 member countries of the European Union, referred to as the EU-18 (for details regarding case selection and data composition, see “The financialization of regions: empirical results” section and “Table 3, Appendix”). The period of analysis ends in 2013 for the sake of consistency throughout the paper as comprehensive and comparable data have been available up to this point.
Christophers (2015) actually differentiates between fees, gains, premia and spread. However, I argue that for the purpose of this paper I can rightfully subsume all four of these under my trichotomy of interest, investment and (fee) income.
All mathematical operations were calculated with STATA 14.1.
This excludes the two levels of Local Administrative Units (LAU 1-2) that are used in EU statistics and were formerly known as NUTS 4-5 (Eurostat 2015e).
I initially included residential loans as an additional variable for (H3), but decided to drop it because of its too strong correlation with household debt.
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Schwan, M. Which roads lead to Wall Street? The financialization of regions in the European Union. Comp Eur Polit 15, 661–683 (2017). https://doi.org/10.1057/s41295-017-0098-6
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DOI: https://doi.org/10.1057/s41295-017-0098-6