Corporate Investment Behavior and Level of Participation in the Global Value Chain: A Dynamic Panel Data Approach

Dhaha Kuantan, Hermanto Siregar, Anny Ratnawati and Solikin Juhro

MPRA Paper from University Library of Munich, Germany

Abstract: This study was conducted to comprehensively identify factors that potentially influence corporate investment behavior, including micro, macro, and sectoral variables. Furthermore, investment behavior was studied across nations based on their participation in the global value chain (GVC), which was evaluated based on commodities, limited manufacturing, advanced manufacturing, and innovative activities. The study uses the dynamic panel data analysis and Generalized Method of Moment (GMM) estimation for a sample of 800 corporations, with data spanning over 2000−2019. The study result shows that in all types of countries, the coefficient lag indicator of capital expenditure statistically has a significant effect on capital expenditure. Sales growth, exchange rate, and GDP have a significant positive effect on corporate investment growth, while DER has a negative effect. In commodity countries, corporate investment is influenced by sales growth, exchange rate, and FCI. The variables that influence corporate investment in manufacturing countries are the FCI, exchange rate, sales growth, GDP, and DER. In innovative countries, variables that significantly affect capital expenditure are DER, GDP, and TobinQ. In each type of country, the interaction terms between exchange rate and commodity price are positive and statistically significant.

Keywords: Global Value Chain; Corporate Investment; Capital Expenditure (search for similar items in EconPapers)
JEL-codes: F1 F2 F3 G0 G3 (search for similar items in EconPapers)
Date: 2021-12-31, Revised 2021-10-23
New Economics Papers: this item is included in nep-fdg and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in ournal of Asian Finance, Economics and Business JAFEB Volume 8 Issue 12 Archive (JAFEB: ISSN 2288-4637, e-ISSN 2288-4645).8(2021): pp. 10-15

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/115417/2/MPRA_paper_115417.pdf original version (application/pdf)

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:pra:mprapa:115417

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().