Profitability Crisis Research Articles

From Partnership to Rivalry: China and the USA in the Early Twenty-First Century

Two unconnected crises in the 1970s, a crisis of profitability of global capitalism and a deep crisis of political legitimacy in China, led to creation of a formidable alliance between corporate/financial-led US capital and the Chinese state that sought to resolve both crises by opening China for corporate exploitation. The solution, however, masked different objectives. Transnational corporations moved to China in search of cheap labour to counter falling profits and Beijing sought to use foreign capital to develop the Chinese economy and gain access to technology. Over time China’s interests and those of the USA diverged, as US deindustrialisation became the obverse of China’s dynamic industrialisation. Factions within the US elite began to promote a different approach towards China than that of alliance and accommodation and were able to grab the upper hand during Donald Trump’s presidency, advocating an aggressive approach towards China. This posture consolidated under the Biden administration. These developments set up a struggle for hegemony to which China and the USA bring differing advantages and disadvantages. While a hegemonic transition is one possible outcome of this conflict, the possibility of a hegemonic stalemate or hegemonic vacuum cannot be discounted.

How does falling incumbent profitability affect energy policy discourse? The discursive construction of nuclear phaseouts and insufficient capacity as a threat in Sweden

What happens to energy policy discourse when falling profitability makes it difficult to frame incumbent technologies as necessary for providing affordable energy? And how does this affect energy policy? This article investigates how Swedish energy policy discourse responded to a profitability crisis that struck its incumbent nuclear regime in 2016, and how a political decision to support nuclear power was legitimized. It uses Carol Bacchi's Foucault-inspired policy analysis to analyse 13 interviews and 31 policy documents, and shows how the crisis was met with the framing of nuclear power as a “plannable” energy source (in contrast with intermittent renewables) that was necessary for ensuring capacity adequacy, and with the construction of an ultimatum: to remove a tax on nuclear power or to see nuclear power phased out so abruptly that the power system would be jeopardized. It explores the discursive and institutional conditions that enabled this framing, argues that similar discourses are likely to be constructed in other contexts where capacity adequacy is a more pressing impediment to energy transitions than in Sweden, and points out that energy research risks reproducing dominant discourses by overstating the merits of incumbent baseload technologies.

Digitalization and law: innovating around the boundaries

AbstractRecent developments in digital technologies have challenged the ways in which service firms create, deliver, and capture value. Although research and practice suggest business model innovation as an effective response to digitalization, many firms are not willing to make radical changes in the architecture of the firm’s activities. In this study, we take an in-depth look at which factors influence the firm’s capability for technology-driven business model innovation in the legal industry context. As our empirical context, we have chosen the legal industry, notorious for its risk aversion and for practices that inhibit innovation, but where the focus on digitalization is increasing due to external pressures. We interviewed nine law firms in Norway, representing together the largest share of the country’s legal services market, four of them being traditional law firms and the rest being newly established yet large digital New Law organizations. We find that profitability acts both as an inhibitor of business model innovation for established firms and as a driver for New Law firms. However, the relatively high job satisfaction of Norwegian lawyers in comparison to their US-based counterparts dampens the pull of technological opportunities on business model innovation by making human capital more difficult to acquire by new entrants. Barring an unexpected profitability crisis, digitalization of the Norwegian law sector will not disrupt traditional law firms’ business models. However, New Law firms are accumulating the competences required to compete with the incumbents.

Organizational Models and Dynamic Capabilities: From Bureaucratic Structures to a Freedom and Emotional Management for a Sustainable, Participative and Innovative Bank. The Case of Italian Banks

The thesis that we support in this introductory work, and which we propose for discussion and technical-scientific debate, is that even the online bank, and even better the digital bank, towards which we are moving with ever-increasing acceleration, cannot escape the trends, now widespread in businesses, towards flexible and decentralized models, which recognize the principle of self-organization and empowerment, and therefore towards organizational forms that involve and participate managers and employees. Organizational models that place human capital and the ethical-motivational wellbeing of people (workers and managers) at the centre and that, if involved in decision-making processes, are capable not only of increasing dynamic capabilities but also of innovating them (renewing) by leveraging, above all, the enhancement of middle management. In this work we argue that the characteristics of organizational models promote the dynamic capabilities in a circular approach integrating vertical and horizontal competences in a flattening organization. Freedom and Emotional management shape organizations capable of adapting and regenerating even in rapidly changing environments. Reinforcing this position is the circumstance that Italian banks find themselves having to redesign their business and managerial models not only to make them economically and financially sustainable to counter the current profitability crisis, but also to make them consistent with social (and environmental) sustainability criteria by adapting to the new European regulation. A transformation that push towards the increasing convergence of eco-efficiency and eco-effectiveness with more participating and creative human resources for the resilience.

Investigating Relationship Between Liquidity and Profitability Ratios in Banks

There is no doubt that with the intensification of the financial and political crisis in recent years in Afghanistan, many banks faced a severe financial and profitability crisis, in general, among many registered and official banks in the Central Bank of Afghanistan, a large number it suffers from liquidity problem and lack of profitability. Liquidity refers to how assets can be converted into cash at the earliest time or at the lowest cost, which is called an asset with high liquidity. In terms of liquidity, the asset's liquidity is high, so it can be converted into cash at a very low cost and quickly. The higher the liquidity of an asset, the more useful it will be. Also, profitability shows the bank's ability to earn income from its assets. After examining variables such as (benefit or profitability, return on capital and liquid assets), this research examines the relationship between banks' liquidity ratios and profitability using multivariable linear regression during the years (2016-2020). The research findings show a weak but positive relationship between liquidity ratios and profitability of banks, considering the research results and also smaller than α= 0.05, so the null hypothesis can be rejected and the alternative hypothesis can be confirmed.

Unclosure: The international law of seabed mining and the systemic cycles of capital accumulation

Abstract The growing electric vehicle industry is heavily reliant on minerals like lithium, cobalt, nickel, and copper. As corporations scramble to access vast deposits of those minerals lying in the ocean floor, the international law of seabed mining has come under scrutiny. This article situates negotiations concerning that law, which took place between 1973 and 1994, within Giovanni Arrighi’s historiographical framework of the systemic cycles of capital accumulation. It argues that the legal regime in question was shaped by the Reagan administration, as part of a strategy to solve a profitability crisis affecting US nationals. While temporarily diverting wealth towards American financial markets, however, the legal arrangements that the United States imposed could not affect the dynamics of capital accumulation on a global scale.

What Cannot Be Done

ABSTRACT This essay argues that recent catastrophizings over freedom of speech are symptoms of a conjunctural crisis in the North Atlantic world. They index, in the main, a crisis of profitability and deindustrialization in the Global North, as seen for instance in the lumpenproletariatization of the working and professional classes; increasing domestic resistance by racially minoritized groups to police violence and murder; sustained insurgencies to imperialism abroad; the militarization of borders; and widespread crises occasioned by climate change. The writings of Hannah Arendt, I argue, offer an acute angle into how a celebrated thinker in the Global North advanced influential analytical categories for policing this conjunctural crisis. Ultimately, I argue, apocalyptic discourses about the unsayable (“cancel culture,” “wokeness,” “de-platforming”) seek to make unthinkable ongoing and emergent radical uprisings, insurgencies, and revolution.

Racialized Obsolescence: Multinational Corporations, Labor Conflict, and the Closure of the Imperial Typewriter Company in Britain, 1974–1975

AbstractThis article will explore one of the most significant strikes by migrant workers in Britain during the 1970s and the subsequent company closure the year after their victory. In May 1974, a predominantly South Asian workforce at the Imperial Typewriter Company in Leicester went on strike over unequal bonus payments and discrimination in promotion. The shop stewards committee and Transport & General Workers Union branch refused their support and the workforce split partly on racial lines. The strikers stayed on strike for almost 14 weeks until they emerged victorious. Though it appears as a central reference point in histories of migrant experience in Britain, the strike and closure has garnered little systematic, primary research. This article will fill this gap through the use of published sources and extensive unused archival deposits. During the strike part of the largely South Asian workforce sought to break with the racialized division of the workforce between different groups, skill levels, and work-types. Almost immediately after the strike ended in victory the company announced its intention to close down the vast majority of its British production. In Hull 1400 jobs were lost and in Leicester over 1600 were to go. This article shows that whilst the strike might have been the start of a politically, culturally, and intellectually significant period of significant protagonism by Britain's first-generation black and racialized working class, it also marked the beginning of the end of an industrial model dependent on the hyper-exploitation and racialized subordination of their labor. The closure was framed by contemporaries and subsequent historical accounts as a dispute marked more by the end of empire than worker obsolescence. As an article in the Guardian on the closure of the plants was put it in January 1975, it was ‘The day that Imperial&s empire fell'. Yet it might be more accurate to understand the strike as an early premonition of the globalisation of manufacturing production which was to emerge strongly in the 1980s and 1990s. The experience of Imperial Typewriters highlights the central importance of racialized labour hierarchies and immigrant counter-militancy in post-war Britain. The Imperial Typewriter Company provides a case study of how worker resistance to labour intensive modes of capital accumulation, in relatively low capital intensive industries, during a global crisis of capitalist profitability, was followed by the decision of a multinational corporation to immediately transfer its production overseas. The closure of Imperial Typewriters therefore offers a means to reconceptualize how we understand the 1970s as a period of interlocking crises, as well as the major shift of power from labour to multinational capital which emerged in its wake. The findings of this article indicate that British workers were significantly disempowered before the electoral victory of Margaret Thatcher in 1979. Recentering labor conflict in the history of technological obsolescence can offer alternative perspectives on why the British left and trade unions were unable to resist the rise of neoliberalism.

The bioeconomy, carbon sinks, and depoliticization in Finnish forest politics

The forest bioeconomy in Finland has emerged as a project that seeks to resolve emergent contradictions in the capitalist ecological regime and to reconfigure spatial, temporal, and economic relations. The bioeconomy rose to public consciousness during the 2010s, especially after its adoption as one of the spearhead projects of the 2015–2019 center-right coalition government. The forest industry's bioeconomic plans are also an attempt to hegemonize and depoliticize a particular political view of forests in the era of climate change. In this paper, the politics of the bioeconomy and carbon sinks are scrutinized in the context of the 2019 parliamentary election season, during which forest use was a central political issue due to investments in new biorefineries. A data set of 80 newspaper articles is analyzed through critical discourse analysis. The analysis identifies three key discursive frames that legitimize the political imaginary of the bioeconomy: 1) rural reinvigoration and the defense of the nation's peripheries through spatial populism; 2) a view of forests as high-throughput carbon conveyors that conform to the temporalities of capital; 3) the establishment of the bioeconomy as a high-value accumulation regime that can resolve the profitability crisis of the paper and pulp production model.

Surplus and capital profitability in the Spanish economy, and comparison with the Euro area. A political economy approach

ABSTRACT The article studies the evolution of both surplus and profit rates in the Spanish economy during the phase of the housing bubble, the subsequent crisis and the recent economic recovery (1995─2017), comparing as well core and peripheral economies of the Eurozone. From various methodological approaches and showing several indicators, this paper finds an underlying deep profitability crisis and an alarming drop in what we call the productivity of surplus, without reaching previous levels of profitability at the end of the period. This path has been offset by a reduction in interest rates, which promoted corporate indebtedness. The huge decrease of profitability in Spain is however consistent with its peripheral insertion into the Euro area. In opposition, the more advanced economies of the region were able to keep the level of capital profitability and even increasing the volume of surplus.

Profit rates and assets-price inflation in the Spanish economy

The paper provides an in-depth analysis of profitability in Spain between 1995 and 2014, showing that behind the asset-price inflation of the growth period and its corresponding macroeconomic imbalances, an underlying problem of capital valorization can be found. For this purpose, a study of various measures of profitability is carried out based on the concept of productive labor and highlighting the role of finance (interest rates and indebtedness). The evolution of the profit rate in previous years is also shown , together with a comparison with countries in the Eurozone, both in the most advanced areas and in the periphery. The paper reveals the large extent of the underlying profitability crisis, with a huge fall of profit rates from the late sixties, during the period of the housing boom, and throughout the subsequent recession. In addition, this drop in profitability stands out in relation to other economies of the European periphery. Hence, the study puts the rate of profit at the center of the debate on the Great Recession in Spain, despite its absence in much of the economic literature.

ОСНОВНІ ТЕНДЕНЦІЇ РОЗВИТКУ МАЛОГО І СЕРЕДНЬОГО БІЗНЕСУ В УКРАЇНІ

Анотація. Акцентовано увагу на визначенні та аналізі тенденцій розвитку малого і середнього бізнесу. Актуальність дослідження визначається, насамперед, формуванням передумов існування і розвитку «середнього класу» (суб’єктів малого i середнього підприємництва), як стабільного та успішного електорату, основних платників податків, і як наслідок — джерела наповнення дохідної частини державного бюджету. Використано аналітичні та статистичні методи при виявленні та опрацюванні вітчизняних та іноземних статистичних даних, метод експертних оцінок при формуванні структурних моделей, історичний і логічний методи при екстраполяції стану попередніх років на майбутнє. Акцентовано увагу на основних перевагах малого і середнього бізнесу порівняно з великими підприємстві, передумовах їхнього створення та реалізації своїх комерційних інтересів. Зазначено, що вітчизняна спрямованість на регіональну децентралізацію забезпечує можливості для динамічного розвитку зазначеного бізнесу в регіонах, гнучкість і адаптивність малих підприємств до зовнішніх умов також є домінуючими рисами для розвитку в умовах сьогодення. Аргументовано актуальність теми дослідження через виокремлення статистичних даних про кількість працівників малого і середнього бізнесу: в цілому 2018 року підприємства з кількістю найманих працівників менше ніж 250 осіб становили понад 99 % усіх підприємств у національній економіці. Виявлено, що оцінку динаміки розвитку малого і середнього бізнесу в Україні варто здійснювати за системним підходом, згідно з яким Система показників малого і середнього бізнесу містить кількісні та якісні, макро- і мікро-, індивідуальні та зведені показники. Наведено переваги і характеристики кількісного та якісного підходу до оцінювання ефективності діяльності малого і середнього бізнесу. Зазначено особливості комплексного підходу, сформованого Болонським комітетом. Класифікація підприємств, що описана в чинному законодавстві України для дослідження, визначена як базова для окреслення основного понятійно-категорійного апарату визначення та аналізу тенденцій розвитку малого і середнього бізнесу. Для досягнення основної мети дослідження опрацьовано дані щодо кількості підприємств малого і середнього бізнесу, виявлено, що внаслідок інерційності економічний процесів найменша кількість функціонуючих підприємств припала на 2012 рік. Виявлено, що одним із ключових показників в оцінці якості функціонування та розвитку суб’єктів середнього і малого підприємництва виступає кількість зайнятих працівників у суб’єктів великого, середнього, малого та мікропідприємництва. Зауважено, що одними з важливих показників результативності діяльності досліджуваних підприємств є обсяг виготовленої і реалізованої продукції та величина створеної доданої вартості. Зазначено, що одним із відносних показників, що характеризує стан і платформу для реалізації майбутніх змін у діяльності малих та середніх підприємств, є показник рентабельності операційної та загальної діяльності. Виявлено, що криза прибутковості малого і середнього бізнесу була 2014 року й зумовлена економічними та політичними потрясіннями. Ключові слова: малий і середній бізнес, класифікація підприємств, вироблена і реалізована продукція, рентабельність діяльності. JEL Classification L26 Формул: 0; рис.: 9; табл.: 2; бібл.: 15.

Institutional peculiarities of agricultural technoparks formation in Russia

The article is devoted to institutional features of agricultural technoparks as a new form of scientific and industrial cooperation in agriculture, possessing system interrelation with steady development of rural territories, export of agricultural production and possibilities of a conclusion of a domestic agrarian science on world level of researches. Long-term crisis manifestations in Russian agriculture in recent years have only been purchased quantitatively, mainly due to the winning conjuncture of export markets, but not overcome qualitatively, which retains its main disproportions and related risks. The given crisis phenomena are considered in article as system which subsystems are agrarian science, state support of agricultural commodity producers, development and financing of rural territories. These three interrelated and interdependent problems, on the one hand, presented by the crisis of overproduction of budget-funded scientific research in agriculture, and by the crisis of profitability of agricultural production, on the other hand, by the crisis of budget financing of rural areas, can be comprehensively solved through the creation of agricultural technology parks as a means and mechanism for the development of continuous scientific and production cooperation in agriculture and its digital transformation.

Gig Economy, Austerty and “Uberization” of Labor in Brazil (2014 – 2019)

The aim of the present paper is to understand the exponential growth of “Uberization” of labor in Brazil by analyzing the economic crisis and the austerity program putted in practice from 2014. The emergence of Gig Economy and the “Uberization” of labor is a global trend in digital age and Brazil has experienced the exponential growth of these type of labor relations in recent years. Millions of Brazilian workers now have their entire income exclusively from digital platforms without labor rights. However, its only possible to understand this process considering the economic crisis and, as a response of it, the austerity program. The offensive of capital over labor as a response of the profitability crisis penalized the working class and provided the rapid growth of the “Uberization” of labor in Brazil and an alternative for the capital accumulation on the other side.

Особливості трудових відносин в Україні на період встановленого карантину (Covid-19)

Annotation. Introduction. The author investigates in his article the main drawbacks of the Ukrainian legislative base that may cause difficulties for employers and employees during the COVID-19 pandemic. While reading this article you will find several solutions on how to limit salary expenses of you company or firm, lead in remote or part-time working schedule on the enterprise and grant employees unpaid leave. The article also deals with the procedure of the paper work that should be done while processing sick leaves of the people who suffered from the COVID-19 disease or contacted with the COVID-19 patients. Purpоse. The purpose of this article is to identify the shortcomings of labor legislation during quarantine and restrictive measures related to the spread of coronavirus disease (COVID-19). Consider and analyze new approaches in building labor relations between employees and employers in the face of rising unemployment and the introduction of telework. Results. The pandemic covered 210 countries and territories. Studies have shown that tens of millions of people have lost their jobs. According to various social survey centers, every third company surveyed optimized the payroll, sent employees to remote work with a reduction in wages, reduced staff and transferred some workers to contracts. Today it is possible to exercise the right to receive partial unemployment benefits for insured workers who have lost part of their wages due to forced downtime or reduction of working hours due to quarantine. Cоnclusiоns. Today, much responsibility lies with the subjects of labor relations, much depends on the employees and employers, on their responsibility and charity. State aid to those categories that were more vulnerable during the crisis remains important. Financial assistance can take the form of grants and grace periods on outstanding loans – in order to support and overcome the profitability crisis. Keywоrds: labor relations; pandemic; wages; COVID-19.

Financial sector actors, the state, and the rescaling of Jakarta’s extended urban region

This article analyzes the role of financial sector actors in recent plans for the expansion of the extended urbanizing region around Jakarta. An emergent literature on financialization has argued that, in the contexts of wealthy countries, the politics of the production of urban space has been transformed by capital switching to the urban built environment in the aftermath of the crisis of profitability of industry that deepened in the 1970s. Urban planning and policy, in this view, have increasingly been shaped by the interests of banks, hedge funds, pension funds, and other financial sector actors. This article argues that a focus on the changing role of financial sector actors is highly relevant to the Jakarta case, but that theories of the financialization of urban production must take into account two significant potential sources of variation in urban contexts in the Global South. These are: variation in the role of the state, and especially the national state, in fostering regulatory, fiscal, political, and institutional environments to attract international financial actors; and variation in the sources of finance that are shaping urban outcomes. In the extended Jakarta region, the recent wave of proposals for megaproject infrastructure investments have reflected a historically and contextually specific interaction between financial capital and national state actors who seek to extend their power by maximizing their ability to direct urban development in ways that build political coalitions and feed discourses of state developmentalism. These proposals also reflect the current moment of capital switching from China, which has provided the Indonesian state with an alternative source for, and model of, financing urban development, albeit one that poses distinct geopolitical and financial risks. The result of this combination of circumstances has been a state strategy of engagement of capital, in which the Indonesian state has sought to assert new economic powers through the empowerment of state-owned enterprises (SOEs) in urban development, and in which the state strategically tacks between various sources of capital to maximize its agency and autonomy. The paper illustrates these dynamics through an examination of the Jakarta-Bandung high speed rail project, a 142-kilometer rail project connecting Jakarta and the city of Bandung that is to be financed with loans from the China Development Bank and developed by a consortium if Indonesian and Chinese SOEs.

Profitability shocks and recovery in time of crisis evidence from European banks

This paper contributes to the existing literature on bank crisis and bank profitability by shedding light on “profitability shock” (i.e. a sudden and sizeable decline in profitability) and “profitability recovery” (i.e. returning to the previous level). Using a sample of 109 European bank holding companies over the years 2006-2016, we investigate the main drivers of these profitability shocks and the factors allowing banks to regain profitability and avoid a more severe crisis. Our findings show that (1) the profitability crisis has its roots in the lending activity and in the deterioration of the loan portfolio caused by a strong risk appetite that is not counterbalanced by adequate loan loss provisions and capitalization; (2) banks that recover after the profit shock adopt a more conservative lending policy, reduce their credit offer and tackle more effectively the NPL issue.

Was the Great Recession a Crisis of Profitability?

Was the Great Recession a Crisis of Profitability?Guglielmo CarchediGuglielmo CarchediLooiersgracht 19e, 1016VR Amsterdam, The Netherlands. [email protected]Search for more papers by this authorPublished Online:September 2016https://doi.org/10.1521/siso.2016.80.4.495PDFPDF PLUS ShareShare onFacebookTwitterLinkedInRedditEmail ToolsAdd to favoritesDownload CitationsTrack Citations About Previous article Next article FiguresReferencesRelatedDetails Cited byCited by1. Associative Democracy: From ‘the real third way’ back to utopianism or towards a colourful socialism for the 21st century?Online publication date: 8 December 2021. Go to citation Crossref Google Scholar Volume 80Issue 4Oct 2016 Information© 2016 by S & S Quarterly, Inc.PDF download

KRIZNI MENADŽEMENT KAO DEO STRATEŠKOG MENADŽMENTA USLUŽNIH KOMPANIJA

Economic conditions, service companies, in more or less all the countries of the world, characterized by complexity and fluctuation. Special economic conditions, particularly in conditions of rapid globalization process and the global financial crisis, have shown a constant decrease profit ability of Address of the corresponding author: Pero Petrovic  pera@diplomacy.bg.ac.rs Petrovic P. Krizni menadžment kao deo strateskog menadžmenta FBIM Transactions Vol. 4 No. 2 pp. 120-128 Published: July 2016 MESTE │121 service companies and thus worsening financial position. It is a kind of crisis of operations of insufficiently adaptable business-system environment. Crisis management comes to the fore a crisis, enterprises, primarily related to the development of the situation in which the company has reached a critical point with certain characteristics. However, it is a definition of all the hallmarks of the crisis the company. However, in a narrower sense, the crisis companies should be seen as a process in which, unplanned and unwanted, endanger the fundamental economic objectives of the company the goal of preserving the capital invested, the goal of profit (profitability), the purpose of liquidity and solvency of the company. Therefore, identify four main phases of the crisis of business enterprises: strategic crisis, the crisis of profitability, liquidity crisis, insolvency and debt. Recognizing and identifying the symptoms of the crisis, and to discover the causes of the crisis of relevant companies in general, and particularly in the context of the global financial and economic crisis, in particular, conditions for the introduction of specific forms of business management in a crisis, and crisis management.

Accumulation by Dispossession: A Marxist History of the Formation of the English Premier League

The decade of the 1980s witnessed massive changes in the internal structure and functioning of English football.1 Several rules, instituted during the infancy of the professional game to limit profit-making, were overturned with remarkable rapidity within the space of a few years, culminating in the formation of the English Premier League (EPL) in 1992. In this paper, I engage with two questions. One, why and how was the century-old structure of English football so rapidly transformed and what were the consequences? Two, what sort of Marxian theoretical framework can we use to understand the historical trajectory of English football? With respect to the former, I follow David Harvey’s analysis of neoliberal strategies used to restore upper-class dominance to argue that the formation of the EPL can be interpreted as another instance of accumulation by dispossession, one among myriad attempts to solve the profitability crisis of the 1970s by creating an avenue for financial speculation in football clubs. Together with the deregulation of television, it converted football from a domain formerly regarded as “off-limits to the calculus of profitability” into a “business proper.” In terms of a theoretical framework, I propose that it is useful to think of football as serving global capitalism in a dual manner: as an avenue for accumulation (the accumulation function) and as a tool for legitimizing capitalist rule by producing alienated consciousness in society (the legitimation function).