Eckhard Hein

Rising shareholder power: Effects on distribution, capacity utilisation and capital accumulation in Kaleckian/Post-Kaleckian models

32 Seiten · 4,13 EUR
(13. März 2009)

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The macroeconomic effects of shareholder value orientation and rising dividend payments are assessed by Eckhard Hein in: “Rising shareholder power – effects on distribution, capacity utilisation and capital accumulation in Kaleckian/Post-Kaleckian models”. The focus is on the effects of changes in distribution between shareholders/rentiers, firms and workers, as well as on the effects of increasing ‘shareholder value orientation’ of management’s investment decisions applying two different variants of a Kaleckian model. Hein argues that an isolated increase in the ‘shareholder value orientation’ of management’s investment decisions has a uniquely negative effect on capacity utilisation, the profit rate and capital accumulation in both models. An associated rise in the dividend-capital rate, however, has contradicting effects. In both Kaleckian models the ‘normal’ case of a negative effect on all the endogenous variables, the ‘puzzling’ case of a positive effect throughout, and an ‘intermediate’ case with a positive effect on capacity utilisation and the profit rate and with a negative effect on capital accumulation may arise, depending on the parameter values in the investment and the saving function of the models. ‘Profits without investment’ as observed empirically in the USA since the early 1980s, the ‘intermediate’ case in both models, therefore is a 20 Introduction possible accumulation regime. However, if rising shareholder power is associated with a particularly strong increase in the mark-up and hence with pronounced redistribution at the expense of labour and with a pronounced shareholder value orientation of management’s preferences, the viability of such a regime will be undermined.