Financialisation, Capital Accumulation and Economic Development : A Theoretical and Empirical Investigation of the Nigerian Economy

The primary focus of this study is to highlight those unobtrusive, yet fundamental, factors undermining economic development in Nigeria. To begin with, it posits that the decelerating pace of capital accumulation in Nigeria, which naturally occasions rising unemployment and poverty levels, and widening inequality gap, is the result of the ‘low possibility’ of capitalist enterprises in the country of earning an adequate rate of profit from their productive processes. In turn, the ‘low possibility’ is argued to be the result of the uneven development inherent in the modern capitalist structure, the high cost of capital and of production peculiar to Nigeria, and the ineffective demand for goods made in Nigeria: these elements are viewed as been precipitated by the contradictions of the contemporary political-economic arrangement that organises the Social Structures of Accumulation. For Nigeria to ‘develop’, it is contended that the unobtrusive elements inherent in the contradiction of the political-economic economic that undermine the capitalists’ ability to earn a commensurate rate of profit in the country needs to be fully addressed first. Furthermore, this study suggests that it is crucial the country embraces knowledge-based industrialisation if it is to achieve some form of ‘competitive advantage’ in the global market, which could enable its productive processes extract a commensurate level of profit from the market. To facilitate the knowledge-based industrialisation, the state should, not only create a conducive environment for industrial development but also play the lead role in transforming the peripheral and oil dependent economy to a knowledge-based economy by coordinating business organisations and investing in high-risk innovations.

A Historical Materialist Approach to the Eurozone Crisis: Fictitious Capital, States, and Capital Accumulation

This dissertation examines the ongoing European sovereign debt crises that began with Greece in 2009, in the wake of the US subprime mortgage crisis. Through the application of a historical materialist approach, I attempt to understand the on-going crisis in the European Monetary Union (EMU) by investigating root causes of sovereign debt crises, relations of power, and main beneficiaries of the policy responses. My theoretical framework hinges on three contradictions in capitalism: the tendency towards overaccumulation, the tension between fictitious capital and the productive base, and the contradiction inherent in capitalist states between their role as a national state and as a class state. In contrast to the dominant positions that locate the cause of the crisis within either: debtor states; creditor states; or the framework at the EMU, I argue that these sovereign debt crises are actually a broader crisis of crisis of capitalism within the EMU itself. In order to do so, I trace the evolution of the political economy of the Eurozone in the post-Bretton woods era, with a particularly focus on the credit system. More specifically, I argue that these crises are the result of an interaction between three meso-level contradictions that have developed within the EMU region: 1) Germany’s postwar accumulation regime, which has produced a deep crisis of overaccumulation; 2) the contradictory processes associated with the neoliberal logic of the EMU, by which I mean the rush to lower barriers to credit and finance at the expense of all else; and 3) credit-fueled, consumption-based EMU integration in the periphery; and. These three contradictions came together in the wake of the 2007-2008 US subprime crisis to form an overall crisis of capitalism in the Eurozone, expressed, as I suggest, as a crisis of fictitious capital. This dissertation aims to contribute to the ongoing project among critical political economists to de-naturalize and re-politicize money, while challenging the hegemony of monetarism within neoliberalism. Second, there has yet to be a comprehensive study that examines the EMU, Germany, and the crises in the periphery from a holistic, historical materialist analysis.

The accumulation of financial and social capital as a means to achieve a sustained competitive advantage for consumer co-operatives

By so far, scholars have discussed how the characteristics of consumer co-operatives (cooperative principles, values and the dual role of members as the users and owners) can potentially give them a competitive advantage over investor-owned firms (IOFs). In addition, concern for the community (as partly derived from locality and regionality) has been seen as a potential source of success for consumer co-operatives. On the other hand, the geographicbound purpose of consumer co-operation causes that consumer co-operative can be regarded as a challenging company form to manage. This is because, according to the purpose of consumer co-operation, co-operatives are obligated to 1) provide the owners with services and goods that are needed and do so at more affordable prices than their competitors do and/or 2) to operate in areas in which competitors do not want to operate (for example, because of the low profitability in certain area of business or region). Thus, consumer co-operatives have to operate very efficiently in order to execute this geographic-bound corporate purpose (e.g. they cannot withdraw from the competition during the declining stages of business). However, this efficiency cannot be achieved by any means; as the acceptance from the important regional stakeholders is the basic operational precondition and lifeline in the long run. Thereby, the central question for the survival and success of consumer co-operatives is; how should the consumer co-operatives execute its corporate purpose so it can be the best alternative to its members in the long run? This question has remained unanswered and lack empirical evidence in the previous studies on the strategic management of consumer cooperation. In more detail, scholars have not yet empirically investigated the question: How can consumer co-operatives use financial and social capital to achieve a sustained competitive advantage? It is this research gap that this doctoral dissertation aims to fulfil. This doctoral dissertation aims to answer the above questions by combining and utilizing interview data from S Group co-operatives and the central organizations in S Group´s network (overall, 33 interviews were gathered), archival material and 56 published media articles/reports. The study is based on a qualitative case study approach that is aimed at theory development, not theory verification (as the theory is considered as nascent in this field of study). Firstly, the findings of this study indicate that consumer co-operatives accumulate financial capital; 1) by making profit (to invest and grow) and 2) by utilizing a network-based organizational structure (local supply chain economies). As a result of financial capital accumulation, consumer co-operatives are able to achieve efficiency gains but also remain local. In addition, a strong financial capital base increases consumer co-operatives´ independence, competitiveness and their ability to participate in regional development (which is in accordance with their geographically bound corporate purpose). Secondly, consumer cooperatives accumulate social capital through informal networking (with important regional stakeholders), corporate social responsibility (CSR) behaviour and CSR reporting, pursuing common good, and interacting and identity sharing. As a result of social capital accumulation, consumer co-operatives are able to obtain the resources for managing; 1) institutional dependencies and 2) customer relations. By accumulating both social and financial capital through the above presented actions, consumer co-operatives are able to achieve sustained competitive advantage. Finally, this thesis provides useful ideas and new knowledge for cooperative managers concerning why and how consumer co-operatives should accumulate financial and social capital (to achieve sustained competitive advantage), while aligning with their corporate purpose.

Absorption in human capital and r&d effects in an endogenous growth model

Until now, in models of endogenous growth with physical capital, human capital and R&D such as in Arnold [Journal of Macroeconomics 20 (1998)] and followers, steady-state growth is independent of innovation activities. We introduce absorption in human capital accumulation and describe the steady-state and transition of the model. We show that this new feature provides an effect of R&D in growth, consumption and welfare. We compare the quantitative effects of R&D productivity with the quantitative effects of Human Capital productivity in wealth and welfare.

Human capital, social mobility and the skill premium

This paper develops a dynamic general equilibrium model to highlight the role of human capital accumulation of agents differentiated by skill type in the joint determination of social mobility and the skill premium. We first show that our model captures the empirical co-movement of the skill premium, the relative supply of skilled to unskilled workers and aggregate output in the U.S. data from 1970-2000. We next show that endogenous social mobility and human capital accumulation are key channels through which the effects of capital tax cuts and increases in public spending on both pre- and post-college education are transmitted. In particular, social mobility creates additional incentives for the agents which enhance the beneficial effects of policy reforms. Moreover, the dynamics of human capital accumulation imply that, post reform, the skill premium is higher in the short- to medium-run than in the long-run.

Capital, Wages, and Growth: Theory and Evidence

Returns to scale to capital and the strength of capital externalities play a key role for the empirical predictions and policy implications of different growth theories. We show that both can be identified with individual wage data and implement our approach at the city-level using US Census data on individuals in 173 cities for 1970, 1980, and 1990. Estimation takes into account fixed effects, endogeneity of capital accumulation, and measurement error. We find no evidence for human or physical capital externalities and decreasing aggregate returns to capital. Returns to scale to physical and human capital are around 80 percent. We also find strong complementarities between human capital and labor and substantial total employment externalities.

Capital, wages and growth: Theory and evidence

Returns to scale to capital and the strength of capital externalities play a key role for the empirical predictions and policy implications of different growth theories. We show that both can be identified with individual wage data and implement our approach at the city-level using US Census data on individuals in 173 cities for 1970, 1980, and 1990. Estimation takes into account fixed effects, endogeneity of capital accumulation, and measurement error. We find no evidence for human or physical capital externalities and decreasing aggregate returns to capital. Returns to scale to physical and human capital are around 80 percent. We also find strong complementarities between human capital and labor and substantial total employment externalities.

Human capital, the structure of production and growth

Do high levels of human capital foster economic growth by facilitating technology adoption? If so, countries with more human capital should have adopted more rapidly the skilled-labor augmenting technologies becoming available since the 1970 s. High human capital levels should therefore have translated into fast growth in more compared to less human-capital-intensive industries in the 1980 s. Theories of international specialization point to human capital accumulation as another important determinant of growth in human-capital-intensive industries. Using data for a large sample of countries, we find significant positive effects of human capital levels and human capital accumulation on output and employment growth in human-capital-intensive industries.

Capital formation in machinery in Latin America, 1890-1930

Investment in machinery is a key aspect in the analysis of long-term economic growth during the era of the spread of industrialisation. But, historiography has only revealed what the pace of capital accumulation was in a few Latin American economies. This article offers continuous (annual) and consistent series on the magnitude of this investment in all of the Latin American countries for the period at the height of the first globalisation, 1890-1930. The paper gives special attention to comparative analysis, showing the differences that exist at the heart of the Latin American community, in the levels of capital formation in machinery as well as in the national development of this over time. The differences in the levels appear very indicative of the unequal degree of development reached by these economies. This article puts to test the hypothesis of intraregional divergence, obtaining the tentative result that there was divergence until 1913, but that there was convergence from 1914-1930.

A search theory of money and commerce with Neoclassical production

This paper advances a highly tractable model with search theoretic foundations for money and neoclassical growth. In the model, manufacturingand commerce are distinct and separate activities. In manufacturing,goods are efficiently produced combining capital and labor. In commerce,goods are exchanged in bilateral meetings. The model is applied to studythe effects of inßation on capital accumulation and welfare. With realisticparameters, inflation has large negative effects on welfare even though itraises capital and output. In contrast, with cash-in-advance, a deviceinformally motivated with bilateral trading, inflation depresses capitaland output and has a negligible effect on welfare.

How market access shapes human capital investment in a peripheral country

Human capital endowment is one of the main factors influencing the level of development of a region. This paper analyses whether remoteness from economic activity has a negative effect on human capital accumulation and, consequently, on economic development. Making use of microdata this research proves that remoteness from economic activity has contributed to explain the divergences in the level of education observed across Spanish provinces over the last 50 years. The effect is significant even when controlling for the improvement of education supply. Nonetheless, the accessibility effect has been petering out since the 1960s due to the decreasing barriers to mobility.

Complementarity between human capital and trade in regional technological progress

The effect of openness and trade orientation on economic growth remains a highly contentious issue in the literature. Trade facilitates the spread of knowledge and the adoption of more advanced and efficient technologies, which hastens total factor productivity (TFP) growth and, hence, per capita income. New technologies that spread through trade require a sufficiently skilled labour force to adapt them to the domestic productive environment. Thus, openness and human capital accumulation will lead to TFP growth and the greater the complementarity between both variables, the higher the TFP growth. This paper discusses the implications of these assumptions and tests their empirical validity, using a pool of data for manufacturing industry in Spanish regions in a period in which both the stock of human capital and openness experienced a notable increase.

Deficit, human capital and economic growth dynamics

Long-run economic growth arouses a great interest since it can shed light on the income-path of an economy and try to explain the large differences in income we observe across countries and over time. The neoclassical model has been followed by several endogenous growth models which, contrarily to the former, seem to predict that economies with similar preferences and technological level, do not necessarily tend to converge to similar per capita income levels. This paper attempts to show a possible mechanismthrough which macroeconomic disequilibria and inefficiencies, represented by budget deficits, may hinder human capital accumulation and therefore economic growth. Using a mixed education system, deficit is characterized as a bug agent which may end up sharply reducing the resources devoted to education and training. The paper goes a step further from the literature on deficit by introducing a rich dynamic analysis of the effects of a deficit reduction on different economic aspects.Following a simple growth model and allowing for slight changes in the law of human capital accumulation, we reach a point where deficit might sharply reduce human capital accumulation. On the other hand, a deficit reduction carried on for a long time, taking that reduction as a more efficient management of the economy, may prove useful in inducing endogenous growth. Empirical evidence for a sample of countries seems to support the theoretical assumptions in the model: (1) evidence on an inverse relationship betweendeficit and human capital accumulation, (2) presence of a strongly negative associationbetween the quantity of deficit in the economy and the rate of growth. They may prove a certain role for budget deficit in economic growth

Deficit, human capital and economic growth dynamics

Long-run economic growth arouses a great interest since it can shed light on the income-path of an economy and try to explain the large differences in income we observe across countries and over time. The neoclassical model has been followed by several endogenous growth models which, contrarily to the former, seem to predict that economies with similar preferences and technological level, do not necessarily tend to converge to similar per capita income levels. This paper attempts to show a possible mechanismthrough which macroeconomic disequilibria and inefficiencies, represented by budget deficits, may hinder human capital accumulation and therefore economic growth. Using a mixed education system, deficit is characterized as a bug agent which may end up sharply reducing the resources devoted to education and training. The paper goes a step further from the literature on deficit by introducing a rich dynamic analysis of the effects of a deficit reduction on different economic aspects.Following a simple growth model and allowing for slight changes in the law of human capital accumulation, we reach a point where deficit might sharply reduce human capital accumulation. On the other hand, a deficit reduction carried on for a long time, taking that reduction as a more efficient management of the economy, may prove useful in inducing endogenous growth. Empirical evidence for a sample of countries seems to support the theoretical assumptions in the model: (1) evidence on an inverse relationship betweendeficit and human capital accumulation, (2) presence of a strongly negative associationbetween the quantity of deficit in the economy and the rate of growth. They may prove a certain role for budget deficit in economic growth

Complementarity between human capital and trade in regional technological progress

The effect of openness and trade orientation on economic growth remains a highly contentious issue in the literature. Trade facilitates the spread of knowledge and the adoption of more advanced and efficient technologies, which hastens total factor productivity (TFP) growth and, hence, per capita income. New technologies that spread through trade require a sufficiently skilled labour force to adapt them to the domestic productive environment. Thus, openness and human capital accumulation will lead to TFP growth and the greater the complementarity between both variables, the higher the TFP growth. This paper discusses the implications of these assumptions and tests their empirical validity, using a pool of data for manufacturing industry in Spanish regions in a period in which both the stock of human capital and openness experienced a notable increase.