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The trends in firm investment and their implications

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Frame of Image in long run. Most of previous studies
tried to identify the factors that affected investment decisions in Korea. In this study, however, our purpose is to investigate the main factors that caused the changing trends in investment in Korean firms since 2000 by estimating the investment function using Korean firm-level data. In section 2, we look at the trends of firm investment using both industry-level and firm-level database. Section 3 reviews previous literature about investment theory and the main reasons for the slowdown in investment. In section 4, we introduce the empirical model of investment function for estimation, firm-level database, and empirical results. Finally, the summary of this study and its policy implication are followed.
2. Trends in Domestic Firm Investment
(1) Trend of Industrial Investment
In this section, we investigate the trend of investment using industrial data in Korea. In table 1, changes in the growth rate of fixed assets by industries are
Unit : %
Source : ECOS.
summarized. In the manufacturing industry, the growth rate of fixed assets is shown to be in the process of recovery from its low point after the financial crisis. More specifically, the average growth rate of fixed assets before financial crisis was 16.0%, but it dropped to 1.8% and then 5.4% in early and the middle of the 2000s respectively. However, it increased to 15.5% in 2008, almost to the level prior to 1998. Also, in the light industry, the growth rate of fixed assets has decr


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Title The trends in firm investment and their implications
Similar Titles
Material Type Reports
Author(English)

Ro, Young-Jin

Publisher

[Seoul]:Korea Institute for Industrial Economics & Trade

Date 2010
Journal Title; Vol./Issue KIET Industrial Economic Review(Current issues):vol. 15(no. 1)
Pages 12
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Direct Investment
Industry and Technology < Entrepreneurship
Holding KDI School of Public Policy and Management

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