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

External URL

https://www.sciencedirect.com/science/article/pii/S0927539822000603

Additional URL

https://doi.org/10.1016/j.jempfin.2022.07.012

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