Financialization of American Corporations: A Revisit of the 1980s Takeover Wave

Abstract

Studies of financialization have explored how shareholder value maximization became the guiding principle of American corporations. Conventional accounts stress that financiers successfully disciplined corporate managers during the 1980s takeover boom. However, the prevailing view exaggerates the centrality and efficacy of market forces. This study recounts the 1980s Deal Decade by focusing on the political dynamics that shaped the regulatory climate for takeovers and, consequently, the transition from managerialism to shareholderism. It demonstrates how local community leaders, workers, and the public, against the backdrop of America’s industrial decline and growing financial instability, strongly resisted takeover artists. The stigmatization of aggressive takeover practices induced financial practitioners and shareholders to change their strategies from the external market for corporate control to internal governance mechanisms by the early 1990s. This study highlights social forces and alternative narratives in the evolution of American financialization, offering further implications for the contemporary debate regarding corporate governance.