Global Banks or Global Investors? The Case of European Debt Flows

euro-1974711_1920[We’re pleased to welcome author Robert Sweeney of the University of Leeds. He recently published an article in Competition and Change entitledGlobal banks or global investors? The case of European debt flows,” which is currently free to read for a limited time. Below, Sweeney reflects on the inspiration for conducting this research:]

ccha_21_3.coverWhat motivated you to pursue this research?

It was part of my PhD. Initially I was examining capital flows in Europe from conventional perspectives and critiquing those approaches. This included a focus on unit labour costs, fiscal imbalances, and so on. I found there was already a quite large body of existing research that critically examined those accounts. That led me to consider more finanical-based explanations of capital flows. Having examined the data I felt that the emphasis on banks was unwarranted. Upon further investigation I became convinced that institutional investors are the driving force in capital markets in general, and debt-based capital flows in Europe in particular.

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

The most challenging part of the research was finding the data. The paper relies on a variety of sources, many of which are pieced together by sifting through consultancy and industry reports. The most surprising thing about the paper was that the centrality of institutional investors in European debt flows had not been established previously. As the article is being published almost 10 years have passed since the crisis broke. A lot has been written on capital flows in Europe and much of existing research has built on or is some variant of previous work. Of course my work doesn’t reinvent the wheel, but I was surprised that nobody had taken my approach before.

What advice would you give to new scholars and incoming researchers in this particular field of study?

Be open minded. Don´t get too wedded to any particular theoretical framework whether you´re part of the consensus or a dissenting voice. Look at the data and see if a certain analytical framework is appropriate. Don´t try to shoehorn a theoretical approach in a context where it is not empircally supported. It can be difficult to realise that you were wrong about something. Rather than trying to defend your position to the hilt, see flaws in your argument as opportunities to learn something new. State your argument as clearly as possible. That sounds simple but all too often in social science research arguments are couched in unnecessary complexity. Economics rightly gets a hard time for mathematical rigour over substance, but the problem generalises across the social sciences. Rather than using complex mathematical constructions, research in other fields too often clouds its arguements in obscurantist language. So if you are reading an article and find it difficult to unpack, it´s probably not your fault.

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Euro photo attributed to NikolayFrolochkin. (CC)

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