Which Roads Lead to Wall Street? Economic Configurations and the Financialization of Regions in the European Union

Since the new Millennium, scholars from various disciplines have been increasingly interested in the rising powers of financial markets and their repercussions on firms, politics and societies. However, despite the emergence of a thematically plural research paradigm under the umbrella term “financialization”, macro-structural studies almost entirely concentrate on national political economies. This paper broadens the perspective and takes regions as sub-national territorial units into account. It thus connects to a debate about regional economic structures which had especially been prominent in political economic research before studies on financialization took off. Regions are understood as important social systems of production with distinct spatial boundaries that possess characteristic trajectories and are embedded in (inter-)national contexts. Therefore, in order to understand not only processes of financialization but also potential changes in institutional configurations of political economies, investigating regions is a promising and essential undertaking. The paper draws on the accumulation-centered branch of the financialization literature and complements it with historical and institutional insights from comparative political economy. Based on Eurostat data it develops a macro-structural indicator and analyzes changes within a set of 89 regions in the five largest European economies (France, Germany, Italy, Spain and the United Kingdom). By applying a regression analysis and accounting for different causal conditions like political and economic institutions, labor force and population characteristics, the paper shows that not only degrees of financialization vary between regions. Also their concrete shapes and pathways exhibit specific core-periphery dynamics within national contexts and are far from being uniform.