Targeted Small Grants Call
PIN’s work has highlighted particular areas that require innovative research to unlock our understanding.
Targeted Small Grant Projects
Financialization and Productivity
Project Lead: Professor Adam Leaver
This project directly addresses the PIN priority area of ‘UK business investment (including
financialisation) behaviour’. It complements existing analyses of the role of shareholder value pressures in encouraging corporate short-termism and low investment (Stockhammer 2006; Tori & Onaran 2018), specifically that i) shareholder distributions compete with investment (Lin and Tomaskovic-Devey, 2013), ii) excessive discounting disincentivises investment (Haldane 2015), and iii) higher returns from finance lead to a switching of investment from productive to financial sources (Orhangazi, 2008).
To assess this, our project takes an interdisciplinary approach which bridges accounting and political economy to examine the accounting and law innovations used within the UK water industry before and after the financial crisis; so chosen because of its weak productivity performance post-crisis (Frontier Economics 2017; Riley et al 2018). These accounting insights may add a missing piece to the productivity puzzle: that when financial engineering proliferates, productivity declines.
The relationship between firm financing and investment in productivity in a very low interest rate environment
Project Lead: Dr Craig Berry
The Productivity Insights Network has identified business investment behaviour as a ‘gap’ in our understanding of what is driving, or impeding, productivity growth. This project looks directly at this issue, by considering the circumstances in which large firms elect to invest in enhancing their productive capacity (through investment in skills, equipment, processes, etc.) or instead expanding their production (generally by employing more workers, without improving productivity) – and indeed how these strategies are balanced.
The project lead, Dr Craig Berry, is a member of the Productivity Insights Network, as well as deputy director of Future Economies (at Manchester Metropolitan University), and formerly a member of the Industrial Strategy Commission (alongside Dame Kate Barker, Professor Diane Coyle, Professor Richard Jones and Professor Andy Westwood) and deputy director of the Sheffield Political Economy Research Institute (University of Sheffield). He has also worked in public policy, including for HM Treasury and the Trades Union Congress.
