Publication Type
Journal Article
Version
publishedVersion
Publication Date
7-2022
Abstract
Capital expenditures of U.S. public firms, relative to total assets, decrease by more than half from 1980 to 2020. The decline is pervasive across industries and firms of different characteristics and cannot be explained by the usual determinants of investment and many other seemingly plausible reasons. The decline is consistent with the transformation in production technology — firms rely more on intangible capital and less on fixed assets in production. Industry-level analyses yield supporting evidence. We observe similar declining trend in capital expenditure in other developed countries but not in most emerging markets.
Keywords
Corporate investment, Capital expenditure, Intangible capital, Firm production, Economic globalization
Discipline
Finance | Finance and Financial Management
Research Areas
Corporate Governance, Auditing and Risk Management
Publication
Journal of Empirical Finance
Volume
69
First Page
15
Last Page
42
ISSN
0927-5398
Identifier
10.1016/j.jempfin.2022.07.012
Publisher
Elsevier
Citation
FU, Fangjian; HUANG, Sheng; and WANG, Rong.
Why do U.S. firms invest less over time?. (2022). Journal of Empirical Finance. 69, 15-42.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7120
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jempfin.2022.07.012