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Profitability, investment and capital productivity

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  • DiMaria, charles-henri

Abstract

Capital accumulation is pivotal to produce goods and services. Common knowledge is that entrepreneurs invest because of potential profit. However, the various theoretical frameworks as well as empirical studies are not providing unequivocal evidence of direct causality between profit and investment decisions. In this document we use Granger symetric causality test as well as asymmetric causality test first proposed by (Hatemi-J, 2012). We examine possible causality between profit and investment, profit and unit labour cost and between investment and productivity.

Suggested Citation

  • DiMaria, charles-henri, 2023. "Profitability, investment and capital productivity," MPRA Paper 118640, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:118640
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    References listed on IDEAS

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    6. Kristina Morkunaite, 2019. "A Secular Decline in Capital Productivity in G7 Countries," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 54(6), pages 385-390, November.
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    More about this item

    Keywords

    Capital productivity; rate of profit; asymmetric causality test;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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