Corporate Capital Accumulation Research Articles

Forecasting Corporate Capital Accumulation in Italy: The Role of Survey-Based Information

While there is a vast macroeconomic literature that singles out the main drivers of capital accumulation in advanced economies during and after the global financial and sovereign debt crises’ recessionary phase, there is much less research seeking to identify both models and variables that possess out-of-sample forecasting ability for gross fixed capital formation. Moreover, micro-founded variables are scarcely employed in macroeconomic forecasting of real investment. We fill this gap by considering a battery of univariate and multivariate time-series models to forecast investment of non-financial corporations in Italy, an interesting case study due to its steep downturn during the two afore-mentioned crises. We find that a vector error correction model augmented with firm survey-based variables accounting for business confidence, demand uncertainty and financing constraints generally outperforms the autoregressive benchmark and a series of competing multivariate time-series models in various, alternative, evaluation samples that take into account the impact of both the global financial crisis and the sovereign debt crisis on forecast accuracy.

Corporate Social Performance, Financialization, and Real Investment in US Manufacturing Firms

In recent years, the global financial and economic crisis are rewriting the relationship between business and society, focusing, among other things, on the role of the process of financialization, not only in the economy as a whole but also within non-financial companies. Shareholder value maximization, together with the commoditization of business, has led to a general short-term approach at the expense of capital accumulation and core business activity, to the detriment of not only firms’ competitiveness and productivity but also of human capital, strategic innovation, business ethics, and long-term growth. Within this framework, this study investigates the role of corporate sustainability, analyzing the nexus between financialization, accumulation of real capital, and corporate social performance, an issue that has been neglected so far. Using a sample of US manufacturing firms from 2002 to 2017, we found that, while financialization was negatively correlated with corporate real investment, the environmental and social firm performance positively impacted corporate capital accumulation. Our results support the belief that a focus on environmental, social, and governance standards, fostering real investments, may enhance a firm’s long-term growth with a positive effect on its long-term value.

Does Anglo-Saxon Corporate Governance Matter for Capitalist Development of Emerging Asian Economy? A Case Study of India

Does Anglo-Saxon Corporate Governance Matter for Capitalist Development of Emerging Asian Economy? A Case Study of India

Does Shareholder Protection Matter for Stock Market Development and Corporate Capital Formation? A Case Study of India, 1976-2005

The paper examines the relationship between shareholder protection, and stock market developments and corporate capital accumulation in India over a time span, 1976-2005. This study uses the time-series technique of cointegration and vector error correction modelling that takes into account the short-term relationship (temporary impact) and the stability of the adjustment process through which the short-term relationship (if any) culminates into a long-term relationship (permanent impact, if any). It examines both-way relationship-whether shareholder protection influences stock market development or changes in stock market scenario create an effective pressure on the law-makers to introduce legal changes or both. It concludes that India’s shareholder protection often dampens stock market and corporate capital accumulation which in turn often prompts government to tighten shareholder protection. It is also observed that increasing shareholder protection leads the corporate sector to move away from the issue of shares to debentures to finance corporate capital accumulation.

Private Capital Accumulation in India since the mid-1970s: Does Stock Market Matter?

This paper seeks to answer the question: does the stock market work? Is there any link between stock market development and private corporate capital accumulation? It seeks an answer to these questions on the basis of a time-series analysis of Indian data. Our conclusion is in favour of a non-existent short-term as well as long-term relationship. Thus it questions the conventional wisdom manifested in the mainstream research works, which are by and large cross-sectional