Determinants of Business Fixed Investment: Evidence from German Firm-Level Data

Buettner Thiess () and Hoenig Anja
Additional contact information
Hoenig Anja: Friedrich-Alexander-University (FAU), Lange Gasse 20, D-90403 Nuremberg, Germany
Authors registered in the RePEc Author Service: Thiess Büttner

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2016, vol. 236, issue 5, 533-556

Abstract: This paper employs a novel firm-level dataset that combines financial accounts of German firms with data from a business survey to shed new light on the demand for capital. The empirical analysis employs firm-specific indicators in order to explore the effects of sales, the cost of capital and indicators of the business climate, which are used by the ifo Institute to provide a leading indicator for the German economy. The empirical results support a robust significant effect of a firm’s cost of capital on the stock of capital with an elasticity not significantly different from –1. Controlling for sales, a good rather than normal business situation is found to be associated with about 8 % higher investment.

Keywords: investment; business climate; cost of capital; capital structure; firm-level data; survey data; neutrality of taxation (search for similar items in EconPapers)
JEL-codes: E22 E32 H25 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.degruyter.com/view/j/jbnst.ahead-of-pr ... -1027.xml?format=INT (text/html)

Related works:
Journal Article: Determinants of Business Fixed Investment: Evidence from German Firm-Level Data (2016)
Journal Article: Determinants of Business Fixed Investment: Evidence from German Firm-Level Data (2016)
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:jns:jbstat:v:236:y:2016:i:1:p:533-556:n:7

DOI: 10.1515/jbnst-2015-1027

Access Statistics for this article

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik) is currently edited by Peter Winker

More articles in Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik) from De Gruyter
Bibliographic data for series maintained by Peter Golla ().