Financialization, Non-Financial Corporations and Income Inequality
Financialization of French non-financial corporations has increased their dependence on earnings through financial channels, and diminished labor bargaining power in income distribution. We examine the effects of these financial revenues on wage share using a panel data model of 6,980 French non-financial firms.
We conclude that increased dependence on financial profits is likely to decrease wage share in non-financial corporations. Moreover, this variable is more influential in our model than other variables traditionally identified by the literature as determinants of functional income distribution, such as technological change, trade openness or labor market institutions.