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Analysis of the Relationship between Financialization and Wage Share: The Case of Turkey

Year 2023, Volume: 7 Issue: 3, 2063 - 2089, 18.09.2023
https://doi.org/10.25295/fsecon.1285753

Abstract

The concept of financialization expresses the point reached by the financial sector through liberalization with the implementation of neo-liberal policies in the post-1980 period, and it has become a subject of recent studies. Studies focusing on the effect of financialization, especially on the distorting effect of income distribution, reveal that this factor is neglected in mainstream studies. The phenomenon of financialization, which first emerged in developed countries and then emerged in developing countries, changes the behavior patterns of companies, households and the state and plays the role of displacing the dynamics of today's capitalism. In this context, this study investigates the effect of financialization on the wage share in national income in Türkiye in the period of 1988-2019 with the time series analysis. The financialization index, which is used to represent financialization in the analysis, was originally obtained by using Principal Components Analysis within the scope of this study. According to the results of the analysis in which the ARDL cointegration approach is used, financialization in Türkiye plays a role in the erosion of the wage share after technological development and trade openness variables. Thus, according to the results, the transformation of the financial sector, which is largely exempt from regulations to financialization, has a distorting effect on the functional income distribution for the Turkish economy.

References

  • Akçay, Ü. & Güngen, A. R. (2022). Dependent Financialisation and Its Crisis: The Case of Türkiye. Cambridge Journal of Economics, 46(2), 293-316.
  • Akıncı, M. & Şahin, Ç. E. (2022) Finans Kapitalizminin Görünen Eli: Türkiye Ekonomisinde Kredi Genişlemesi, Borçluluk ve Grevler Arasındaki İlişkiler. Fiscaoeconomia, 6(3), 1479-1508.
  • Altıntaş, H. (2013). Türkiye’de Petrol Fiyatları, İhracat ve Reel Döviz Kuru İlişkisi: ARDL Sınır Testi Yaklaşımı ve Dinamik Nedensellik Analizi. Uluslararası Yönetim İktisat ve İşletme Dergisi, 9(19), 1-30.
  • Alvarez, I. (2015). Financialization, Non-Financial Corporations and Income Inequality: The Case of France. Socio-Economic Review, 13(3), 449-475.
  • Assa, J. (2012). Financialization and Its Consequences: The OECD Experience. Finance Research, 1(1), 35-39.
  • Bengtsson, E. (2014). Do Unions Redistribute Income from Capital to Labour? Union Density and Labour’s Share Since 1960. Industrial Relations Journal, 45(5), 389-408.
  • Darcillon, T. (2015). How Does Finance Affect Labor Market Institutions? An Empirical Analysis in 16 OECD Countries. Socio-Economic Review, 13(3), 477-504.
  • Dünhaupt, P. (2013). The Effect of Financialization on Labor's Share of Income (No. 17/2013). Working Paper.
  • Dünhaupt, P. (2017). Determinants of Labour’s Income Share in the Era of Financialisation. Cambridge Journal of Economics, 41(1), 283-306.
  • Epstein, G. (2001). Financialization, Rentier Interests, and Central Bank Policy. Amherst, University of Massachusetts.
  • Epstein, G. (2005). Introduction: Financialization and the World Economy. G. Epstein (Ed.), Financialization and the World Economy (3-16). Cheltenham and Northampton: Edwar Elgar.
  • European Commission (EC). (2007). The Labour Income Share in The European Union. Employment in Europe. Brussels: European Commission.
  • Foster, J. B. (2010). The Financialization of Accumulation. Monthly Review, 62(5), 1.
  • Guttmann, R. (2016). Finance-Led Capitalism: Shadow Banking, Re-Regulation, and the Future of Global Markets. New York: Palgrave Macmillan.
  • Hancke, B. (2012). Where Have All the Wage Shares Gone? Trade Unions, Central Banks and Wage Setting in the OECD. Mimeo, London School of Economics.
  • Hein, E. (2012). The Macroeconomics of Finance-Dominated Capitalism and Its Crisis. Edward Elgar Publishing.
  • Hein, E. (2015). Finance-Dominated Capitalism and Re-Distribution of Income: A Kaleckian Perspective. Cambridge Journal of Economics, 39(3), 907-934.
  • Ibrahiem, D. M. (2015). Renewable Electricity Consumption, Foreign Direct Investment and Economic Growth in Egypt: An ARDL approach. Procedia Economics and Finance, 30, 313-323.
  • IMF (2007). The Globalization of Labor. World Economic Outlook. Washington, DC: IMF.
  • Jayadev, A. (2007). Capital Account Openness and The Labour Share of Income. Cambridge Journal of Economics, 31(3), 423-443.
  • Jolliffe, I. T. (1986). Principal Component Analysis. New York: Springer-Verlag,
  • Karaçimen, E. (2013). Political Economy of Consumer Debt in Developing Countries: Evidence from Türkiye. Yayınlanmamış Doktora Tezi, SOAS, University of London.
  • Karaçimen, E. (2014). Financialization in Türkiye: The Case of Consumer Debt. Journal of Balkan and Near Eastern Studies, 16(2), 161-180.
  • Karwowski, E. (2020). Economic Development and Variegated Financialization in Emerging Economies. The Routledge International Handbook of Financialization (162-176). Routledge.
  • Koç, A. (2013). Dünyada Finansallaşma Süreci ve Türkiye Deneyimi. Yayınlanmamış Doktora Tezi, Çukurova Üniversitesi Sosyal Bilimler Enstitüsü.
  • Kohler, K., Guschanski, A. & Stockhammer, E. (2019). The Impact of Financialisation on The Wage Share: A Theoretical Clarification and Empirical Test. Cambridge Journal of Economics, 43(4), 937-974.
  • Kristal, T. (2010). Good Times, Bad Times: Postwar Labor’s Share of National Income in Capitalist Democracies. American Sociological Review, 75(5), 729-763.
  • Krueger, A. (1999). Measuring Labor’s Share. American Economic Review, 89(2), 45-51.
  • Kus, B. (2012). Financialisation and Income Inequality in OECD Nations: 1995-2007. The Economic and Social Review, 43(4), 477-495.
  • Lapavitsas, C. (2009). Financialised Capitalism: Crisis and Financial Expropriation. Historical Materialism, 17(2), 114-148.
  • Lapavitsas, C. (2013). The Financialization of Capitalism: “Profiting without Producing”. City, 17(6), 792-805.
  • Lin, K. H. & Tomaskovic-Devey, D. (2013). Financialization and US Income Inequality, 1970-2008. American Journal of Sociology, 118(5), 1284-1329.
  • Narayan, P. K. (2005). The Saving and Investment Nexus for China: Evidence from Cointegration Tests. Applied Economics, 37(17), 1979-1990.
  • Nikoloski, Z. (2013). Financial Sector Development and Inequality: Is There a Financial Kuznets Curve?. Journal of International Development, 25(7), 897-911.
  • Onaran, Ö. (2007). Wage Share, Globalization, and Crisis: The Case of the Manufacturing Industry in Korea, Mexico, and Türkiye. Political Economy Research Institute (PERI). Working Paper Series, No.132, 1-44.
  • Orhangazi, Ö. (2008). Financialisation and Capital Accumulation in the Non-Financial Corporate Sector: A Theoretical and Empirical Investigation on the US Economy: 1973-2003. Cambridge Journal of Economics, 32(6), 863-886.
  • Oyvat, C. (2011). Globalization, Wage Shares and Income Distribution in Türkiye. Cambridge Journal of Regions, Economy and Society, 4(1), 123-138.
  • Palley, T. (2007). Financialization: What It Is and Why It Matters. Working Paper No. 525, The Levy Economics Institute, Washington D.C.
  • Pesaran, M. H., Shin, Y. & Smith. R. J. (2001). Bound Testing Approaches to The Analysis of Long Run Relationships. Journal of Applied Econometrics, 16(Special Issue), 289-326.
  • Phillips, K. (1993). Boiling Point: Republicans, Democrats, and the Decline of Middle-Class Prosperity (1. Press). New York: Random House.
  • Rodrik, D. (1997). Has Globalization Gone Too Far?. Washington, DC: Institute of International Economics.
  • Qi, H. (2019). A New Literature Review on Financialization. Journal of Accounting, Business and Finance Research, 7(2), 40-50.
  • Sehrawat, M. & Giri, A. K. (2015). Financial Development and Income Inequality in India: An Application of ARDL Approach. International Journal of Social Economics.
  • Shin, H. & Lee, K. (2019). Impact of Financialization and Financial Development on Inequality: Panel Cointegration Results Using OECD Data. Asian Economic Papers, 18(1), 69-90.
  • Stockhammer, E. (2004). Financialisation and the Slowdown of Accumulation. Cambridge Journal of Economics, 28(5), 719-741.
  • Stockhammer, E. (2009). Determinants of Functional Income Distribution in OECD Countries (No. 5/2009). IMK Study.
  • Stockhammer, E. (2013). Why Have Wage Shares Fallen? An Analysis of The Determinants of Functional Income Distribution. Wage-Led Growth: An Equitable Strategy for Economic Recovery (40-70).
  • Stockhammer, E. (2017). Determinants of the Wage Share: A Panel Analysis of Advanced and Developing Economies. British Journal of Industrial Relations, 55(1), 3-33.
  • Tellalbaşı, I. (2011). Sermaye Birikimi ve Finansallaşma Türkiye Örneği. Doktora Tezi, Kadir Has Üniversitesi, Sosyal Bilimler Enstitüsü, İstanbul.
  • Tori, D. & Onaran, Ö. (2017). Financialisation and Physical Investment: A Global Race to the Bottom in Accumulation?. Post Keynesian Economics Study Group Working Paper 1707.
  • Tunali, H. & Özdemir, O. (2017). Türkiye'de Finansallaşmanın Emek Payı Üzerindeki Etkisi Üstüne Bir Deneme. Journal of the Faculty of Economics/İktisat Fakültesi Mecmuasi, 67(1).
  • Üzar, U. (2018). Finansallaşma Fonksiyonel Gelir Dağılımını Etkiliyor mu? Politik Ekonomi Perspektifinden Ampirik Bir Değerlendirme. Yayınlanmamış Doktora Tezi, Marmara Üniversitesi Sosyal Bilimler Enstitüsü.
  • Van der Zwan, N. (2014). Making Sense of Financialization. Socio-Economic Review, 12(1), 99-129.
  • Wood, J. D. (2017). The Effects of The Distribution of Mortgage Credit on The Wage Share: Varieties of Residential Capitalism Compared. Comparative European Politics, 15, 819-847.

Finansallaşma ve Emek Payı Arasındaki İlişkinin Analizi: Türkiye Örneği

Year 2023, Volume: 7 Issue: 3, 2063 - 2089, 18.09.2023
https://doi.org/10.25295/fsecon.1285753

Abstract

1980 sonrası süreçte neo-liberal politikaların uygulanmasıyla birlikte serbestleşmeye başlayan finans kesiminin geldiği noktayı ifade eden finansallaşma kavramı son dönem çalışmalara konu olmaktadır. Finansallaşmanın özellikle gelir dağılımını bozucu yöndeki etkisinin mercek altına alındığı çalışmalar bu faktörün ana akım çalışmalarda ihmal edildiğini ortaya koymaktadır. Öncelikle gelişmiş ülkelerde ortaya çıkan ve daha sonra gelişmekte olan ülkelerde belirginleşen finansallaşma olgusu, şirketlerin, hane halklarının ve devletin davranış kalıplarını değiştirmekte ve günümüz kapitalizminin dinamiklerini yerinden oynatma rolünü üstlenmektedir. Bu kapsamda bu çalışmanın amacı 1988-2019 döneminde Türkiye’de finansallaşmanın milli gelir içerisindeki emek payı üzerindeki etkisini zaman serisi analizi ile araştırmaktır. Analizde finansallaşmayı temsilen kullanılan finansallaşma endeksi bu çalışma kapsamında Temel Bileşenler Analizi kullanılarak özgün olarak elde edilmiştir. ARDL eş-bütünleşme yaklaşımının kullanıldığı analiz sonuçlarına göre Türkiye’de finansallaşma, teknolojik gelişme ve dış açıklık değişkenlerinden sonra emek payının aşınmasında rol oynamaktadır. Dolayısıyla çalışma sonuçlarına göre, düzenlemelerden büyük oranda muaf tutulan finansal kesimin finansallaşmaya olan dönüşümü, Türkiye ekonomisi üzerinde fonksiyonel gelir dağılımını bozucu bir etkiye sahiptir.

Thanks

Değerlendirmeye alan ve inceleyen sekretaryaya, editöre ve hakemlere şimdiden teşekkür ederiz.

References

  • Akçay, Ü. & Güngen, A. R. (2022). Dependent Financialisation and Its Crisis: The Case of Türkiye. Cambridge Journal of Economics, 46(2), 293-316.
  • Akıncı, M. & Şahin, Ç. E. (2022) Finans Kapitalizminin Görünen Eli: Türkiye Ekonomisinde Kredi Genişlemesi, Borçluluk ve Grevler Arasındaki İlişkiler. Fiscaoeconomia, 6(3), 1479-1508.
  • Altıntaş, H. (2013). Türkiye’de Petrol Fiyatları, İhracat ve Reel Döviz Kuru İlişkisi: ARDL Sınır Testi Yaklaşımı ve Dinamik Nedensellik Analizi. Uluslararası Yönetim İktisat ve İşletme Dergisi, 9(19), 1-30.
  • Alvarez, I. (2015). Financialization, Non-Financial Corporations and Income Inequality: The Case of France. Socio-Economic Review, 13(3), 449-475.
  • Assa, J. (2012). Financialization and Its Consequences: The OECD Experience. Finance Research, 1(1), 35-39.
  • Bengtsson, E. (2014). Do Unions Redistribute Income from Capital to Labour? Union Density and Labour’s Share Since 1960. Industrial Relations Journal, 45(5), 389-408.
  • Darcillon, T. (2015). How Does Finance Affect Labor Market Institutions? An Empirical Analysis in 16 OECD Countries. Socio-Economic Review, 13(3), 477-504.
  • Dünhaupt, P. (2013). The Effect of Financialization on Labor's Share of Income (No. 17/2013). Working Paper.
  • Dünhaupt, P. (2017). Determinants of Labour’s Income Share in the Era of Financialisation. Cambridge Journal of Economics, 41(1), 283-306.
  • Epstein, G. (2001). Financialization, Rentier Interests, and Central Bank Policy. Amherst, University of Massachusetts.
  • Epstein, G. (2005). Introduction: Financialization and the World Economy. G. Epstein (Ed.), Financialization and the World Economy (3-16). Cheltenham and Northampton: Edwar Elgar.
  • European Commission (EC). (2007). The Labour Income Share in The European Union. Employment in Europe. Brussels: European Commission.
  • Foster, J. B. (2010). The Financialization of Accumulation. Monthly Review, 62(5), 1.
  • Guttmann, R. (2016). Finance-Led Capitalism: Shadow Banking, Re-Regulation, and the Future of Global Markets. New York: Palgrave Macmillan.
  • Hancke, B. (2012). Where Have All the Wage Shares Gone? Trade Unions, Central Banks and Wage Setting in the OECD. Mimeo, London School of Economics.
  • Hein, E. (2012). The Macroeconomics of Finance-Dominated Capitalism and Its Crisis. Edward Elgar Publishing.
  • Hein, E. (2015). Finance-Dominated Capitalism and Re-Distribution of Income: A Kaleckian Perspective. Cambridge Journal of Economics, 39(3), 907-934.
  • Ibrahiem, D. M. (2015). Renewable Electricity Consumption, Foreign Direct Investment and Economic Growth in Egypt: An ARDL approach. Procedia Economics and Finance, 30, 313-323.
  • IMF (2007). The Globalization of Labor. World Economic Outlook. Washington, DC: IMF.
  • Jayadev, A. (2007). Capital Account Openness and The Labour Share of Income. Cambridge Journal of Economics, 31(3), 423-443.
  • Jolliffe, I. T. (1986). Principal Component Analysis. New York: Springer-Verlag,
  • Karaçimen, E. (2013). Political Economy of Consumer Debt in Developing Countries: Evidence from Türkiye. Yayınlanmamış Doktora Tezi, SOAS, University of London.
  • Karaçimen, E. (2014). Financialization in Türkiye: The Case of Consumer Debt. Journal of Balkan and Near Eastern Studies, 16(2), 161-180.
  • Karwowski, E. (2020). Economic Development and Variegated Financialization in Emerging Economies. The Routledge International Handbook of Financialization (162-176). Routledge.
  • Koç, A. (2013). Dünyada Finansallaşma Süreci ve Türkiye Deneyimi. Yayınlanmamış Doktora Tezi, Çukurova Üniversitesi Sosyal Bilimler Enstitüsü.
  • Kohler, K., Guschanski, A. & Stockhammer, E. (2019). The Impact of Financialisation on The Wage Share: A Theoretical Clarification and Empirical Test. Cambridge Journal of Economics, 43(4), 937-974.
  • Kristal, T. (2010). Good Times, Bad Times: Postwar Labor’s Share of National Income in Capitalist Democracies. American Sociological Review, 75(5), 729-763.
  • Krueger, A. (1999). Measuring Labor’s Share. American Economic Review, 89(2), 45-51.
  • Kus, B. (2012). Financialisation and Income Inequality in OECD Nations: 1995-2007. The Economic and Social Review, 43(4), 477-495.
  • Lapavitsas, C. (2009). Financialised Capitalism: Crisis and Financial Expropriation. Historical Materialism, 17(2), 114-148.
  • Lapavitsas, C. (2013). The Financialization of Capitalism: “Profiting without Producing”. City, 17(6), 792-805.
  • Lin, K. H. & Tomaskovic-Devey, D. (2013). Financialization and US Income Inequality, 1970-2008. American Journal of Sociology, 118(5), 1284-1329.
  • Narayan, P. K. (2005). The Saving and Investment Nexus for China: Evidence from Cointegration Tests. Applied Economics, 37(17), 1979-1990.
  • Nikoloski, Z. (2013). Financial Sector Development and Inequality: Is There a Financial Kuznets Curve?. Journal of International Development, 25(7), 897-911.
  • Onaran, Ö. (2007). Wage Share, Globalization, and Crisis: The Case of the Manufacturing Industry in Korea, Mexico, and Türkiye. Political Economy Research Institute (PERI). Working Paper Series, No.132, 1-44.
  • Orhangazi, Ö. (2008). Financialisation and Capital Accumulation in the Non-Financial Corporate Sector: A Theoretical and Empirical Investigation on the US Economy: 1973-2003. Cambridge Journal of Economics, 32(6), 863-886.
  • Oyvat, C. (2011). Globalization, Wage Shares and Income Distribution in Türkiye. Cambridge Journal of Regions, Economy and Society, 4(1), 123-138.
  • Palley, T. (2007). Financialization: What It Is and Why It Matters. Working Paper No. 525, The Levy Economics Institute, Washington D.C.
  • Pesaran, M. H., Shin, Y. & Smith. R. J. (2001). Bound Testing Approaches to The Analysis of Long Run Relationships. Journal of Applied Econometrics, 16(Special Issue), 289-326.
  • Phillips, K. (1993). Boiling Point: Republicans, Democrats, and the Decline of Middle-Class Prosperity (1. Press). New York: Random House.
  • Rodrik, D. (1997). Has Globalization Gone Too Far?. Washington, DC: Institute of International Economics.
  • Qi, H. (2019). A New Literature Review on Financialization. Journal of Accounting, Business and Finance Research, 7(2), 40-50.
  • Sehrawat, M. & Giri, A. K. (2015). Financial Development and Income Inequality in India: An Application of ARDL Approach. International Journal of Social Economics.
  • Shin, H. & Lee, K. (2019). Impact of Financialization and Financial Development on Inequality: Panel Cointegration Results Using OECD Data. Asian Economic Papers, 18(1), 69-90.
  • Stockhammer, E. (2004). Financialisation and the Slowdown of Accumulation. Cambridge Journal of Economics, 28(5), 719-741.
  • Stockhammer, E. (2009). Determinants of Functional Income Distribution in OECD Countries (No. 5/2009). IMK Study.
  • Stockhammer, E. (2013). Why Have Wage Shares Fallen? An Analysis of The Determinants of Functional Income Distribution. Wage-Led Growth: An Equitable Strategy for Economic Recovery (40-70).
  • Stockhammer, E. (2017). Determinants of the Wage Share: A Panel Analysis of Advanced and Developing Economies. British Journal of Industrial Relations, 55(1), 3-33.
  • Tellalbaşı, I. (2011). Sermaye Birikimi ve Finansallaşma Türkiye Örneği. Doktora Tezi, Kadir Has Üniversitesi, Sosyal Bilimler Enstitüsü, İstanbul.
  • Tori, D. & Onaran, Ö. (2017). Financialisation and Physical Investment: A Global Race to the Bottom in Accumulation?. Post Keynesian Economics Study Group Working Paper 1707.
  • Tunali, H. & Özdemir, O. (2017). Türkiye'de Finansallaşmanın Emek Payı Üzerindeki Etkisi Üstüne Bir Deneme. Journal of the Faculty of Economics/İktisat Fakültesi Mecmuasi, 67(1).
  • Üzar, U. (2018). Finansallaşma Fonksiyonel Gelir Dağılımını Etkiliyor mu? Politik Ekonomi Perspektifinden Ampirik Bir Değerlendirme. Yayınlanmamış Doktora Tezi, Marmara Üniversitesi Sosyal Bilimler Enstitüsü.
  • Van der Zwan, N. (2014). Making Sense of Financialization. Socio-Economic Review, 12(1), 99-129.
  • Wood, J. D. (2017). The Effects of The Distribution of Mortgage Credit on The Wage Share: Varieties of Residential Capitalism Compared. Comparative European Politics, 15, 819-847.
There are 54 citations in total.

Details

Primary Language Turkish
Subjects Financial Economy
Journal Section Articles
Authors

Harun Saraç 0000-0002-4576-9273

Emrullah Özden 0000-0002-1903-2550

Publication Date September 18, 2023
Published in Issue Year 2023 Volume: 7 Issue: 3

Cite

APA Saraç, H., & Özden, E. (2023). Finansallaşma ve Emek Payı Arasındaki İlişkinin Analizi: Türkiye Örneği. Fiscaoeconomia, 7(3), 2063-2089. https://doi.org/10.25295/fsecon.1285753

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