Why Do US Firms Invest Less over Time?

FJ Fu (First Author), S Huang (Participant Author), R Wang (Participant Author)

Research output: Contribution to journalJournal

1 Citation (Web of Science)


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.
Original languageEnglish
Pages (from-to)15-42
Number of pages28
JournalJournal of Empirical Finance
Publication statusPublished - Dec 2022

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  • Capital expenditure
  • Corporate investment
  • Economic globalization
  • Firm production
  • Intangible capital

Indexed by

  • ABDC-A
  • SSCI


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