Hedge funds: agents of change for financialization
Critical Perspectives on International Business
ISSN: 1742-2043
Article publication date: 21 October 2013
Abstract
Purpose
The purpose of this paper is to examine in which ways hedge funds contribute to financialization.
Design/methodology/approach
Two already identified conduits through which financialization operates are applied to hedge funds.
Findings
The paper finds that hedge funds drive the phenomenon of financialization in two major ways, i.e. the financialization of corporations, and the financialization of markets. Hence, hedge funds can be conceived as agents of change for financialization.
Research limitations/implications
There are indications that hedge funds possess disciplinary power. Future research should address this pivotal point, even though such power will be difficult to prove empirically.
Social implications
Hedge funds have been found to potentially increase market volatility. In times of crisis, stricter regulation of these investors that take excessive risks seems prudent.
Originality/value
Through linking “hedge funds” with “financialization” this paper closes a research gap. In addition, the so far rather structural debate about financialization benefits from the actor-centered approach of this paper.
Keywords
Acknowledgements
The author acknowledges the support of the Hans-Böckler-Foundation. This article benefited greatly from valuable advice by Marcel Heires, Philip Mader, Daniel Mertens, Richard Meyer-Eppler, Andreas Nölke and Engelbert Stockhammer. Furthermore, two anonymous reviewers and Stephen Ackroyd provided excellent comments on earlier versions of this paper. All errors remain the author's own.
Citation
Fichtner, J. (2013), "Hedge funds: agents of change for financialization", Critical Perspectives on International Business, Vol. 9 No. 4, pp. 358-376. https://doi.org/10.1108/cpoib-06-2013-0017
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited