Beyond corporate financialization: From global value chains to the conundrum of intangible investments

The article presents a constructive critique of the ‘financialization of the firm’ hypothesis. Without calling into question the idea that financialization has been a major structural change over the last four decades, it argues that the financialization of the firm argument has been pushed too far, especially regarding its ‘crowding-out’ and ‘drain’ effects on investment. Instead, the capacity of finance to accelerate the process of ‘creative destruction’ through the reallocation of capital has not been sufficiently taken into consideration. Consequently, the corporate financialization approaches tend to underestimate other structural changes in business organization, like the associated rise of Global Value Chains (GVCs) and intangible investments, both conceptualized by the ‘smiling curve’ notion. These secular changes challenge the categories of investment and capital we inherited from industrial capitalism. It remains, however, that we do not know how to measure intangible investment.