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The Canadian corporate investment gap

Author

Listed:
  • Chris D'Souza
  • Timothy Grieder
  • Daniel Hyun
  • Jonathan Witmer

Abstract

Business investment has been lower than expected in Canada and abroad since the financial crisis of 2007–09. This corporate investment gap is mirrored in firms’ other financing decisions, as they have increased cash holdings and dividend payments and decreased issuance of debt and equity.

Suggested Citation

  • Chris D'Souza & Timothy Grieder & Daniel Hyun & Jonathan Witmer, 2020. "The Canadian corporate investment gap," Staff Analytical Notes 2020-19, Bank of Canada.
  • Handle: RePEc:bca:bocsan:20-19
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    File URL: https://www.bankofcanada.ca/2020/09/staff-analytical-note-2020-19/
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    More about this item

    Keywords

    Firm dynamics; Transmission of monetary policy;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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