Open AccessUncovering The Myth Surrounding Cash Hoarding And Corporate Capital Expenditures Since 2008
Author(s) -
Rakesh Duggal,
Michael C. Budden
Publication year - 2013
Publication title -
journal of business and economics research
Language(s) - English
Resource type - Journals
eISSN - 2157-8893
pISSN - 1542-4448
DOI - 10.19030/jber.v11i8.7977
Subject(s) - hoarding (animal behavior) , recession , monetary economics , capital (architecture) , economics , capital expenditure , investment (military) , cost of capital , finance , macroeconomics , market economy , history , ecology , foraging , archaeology , politics , political science , law , biology , incentive
If reports in the popular press are to be believed, even though the great recession of 2008 ended in 2009, U.S. corporate capital expenditures did not rebound. Lack of capital investment due to widespread cash hoarding is cited as a reason for the slow economic recovery. This study does not find evidence that S&P 500 firms have slowed their rate of capital expenditures. On the contrary, capital intensive industries, such as materials, energy, and industrials show significant growth in capital expenditures in 2010 and 2011.