Business investment: why is the euro area lagging behind the United States?

Malin Andersson, Valerie Jarvis and Michel Soudan

Economic Bulletin Boxes, 2025, vol. 2

Abstract: Business investment has grown less dynamically in the euro area than in the United States since the early 2000s, but in the aftermath of the pandemic the differential has been particularly marked. This box breaks business investment down by asset type and assesses some of the factors behind this disparity. Analysis suggests that demand, competitiveness, confidence and policy efficiency all contribute to higher tangible investment in the United States. Weaker investment growth in intangibles in the euro area seems to be related to less innovation at the firm level. In addition, firms see uncertainty, energy costs, and regulation in product and labour markets as more severe obstacles to investment in the EU than in the United States. Recent EU policy initiatives and the advancement of the capital market union can provide new impetus to closing the investment gap with the United States. JEL Classification: E22, E6, N10

Keywords: Euro area; intangibles; investment; macro policy; United States (search for similar items in EconPapers)
Date: 2025-03
Note: 427284
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ecb.europa.eu//press/economic-bulletin ... 1~a3130f4f9f.en.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbbox:2025:0002:1

Access Statistics for this article

More articles in Economic Bulletin Boxes from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().