The financialisation of primary sector MNEs

To understand and analyse major developments within the primary sector (i.e. price increases in the 2000s, the re-emergence of state-owned-enterprises and parastatals, and a concentration of capital and market power) a framework that draws on critical political economy is elaborated. By combining the debate on rent theory with the discussion on financialisation, i.e. capital accumulation based on fictitious capital, the following insights are attained. On the one hand, M&A are partially a response to the increasing influence of financial actors on natural resource markets. Simultaneously, the financial sector induced a change in the corporate governance of MNE towards the principle of share-holder value. Moreover, the conflict between extractive companies and natural resource owners (i.e. nation states) over the distribution of rents gained weight due to increasing prices. Strategic M&A allowed MNCs to enhance their bargaining position and secure access to resource reserves. On the other hand, it is characteristic of the companies embedded in the primary sector to follow a mixed accumulation strategy based on both the accumulation of fictitious capital (rent appropriation) and productive capital. Precisely the access to and control over pseudo-commodities define the long-term success of these enterprises. By means of M&A, this access and control is secured, which supports their ability to extract surplus-profits based on rents. Therefore, recent developments in natural resource industries are only partially induced by a general, macroeconomic financialisation.