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External factors affecting investment decisions of companies

  • Bialowolski, Piotr
  • Weziak-Bialowolska, Dorota

In this paper we attempt to investigate the importance of certain external factors on the investment decision among Polish companies. With the use of data from the tailored made Survey on Receivables we examine factors influencing investment decisions of companies in Poland, assess the relation between the branch and company size and importance of the factors and finally we determine the relative influence of these factors on the actual investment reductions. The results showed that first, although the problem of payment delays is the most important single reason determining the investment decisions of Polish companies, its importance decreases when analyzed simultaneously with other reasons. Second, there are two driving forces determining the investment decisions of Polish companies, namely macroeconomic factors and law-related factors with the relative importance of the former lower than the latter. Third, there is a positive association between the importance attached to factors influencing investment decisions associated with either macroeconomic or legal environment and the investment reductions, meaning that companies facing higher investment reductions are also more prone to notice and value the factors influencing these decisions.

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Paper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2013-44.

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Date of creation: 2013
Date of revision:
Handle: RePEc:zbw:ifwedp:201344
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  1. Laux, Volker, 2008. "On the value of influence activities for capital budgeting," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 625-635, March.
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  7. Hogan, Chris E. & Lewis, Craig M., 2005. "Long-Run Investment Decisions, Operating Performance, and Shareholder Value Creation of Firms Adopting Compensation Plans Based on Economic Profits," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(04), pages 721-745, December.
  8. Volker H. Hoffmann & Thomas Trautmann & Jens Hamprecht, 2009. "Regulatory Uncertainty: A Reason to Postpone Investments? Not Necessarily," Journal of Management Studies, Wiley Blackwell, vol. 46(7), pages 1227-1253, November.
  9. Santoro, Marika & Wei, Chao, 2012. "A Note On The Impact Of Progressive Dividend Taxation On Investment Decisions," Macroeconomic Dynamics, Cambridge University Press, vol. 16(02), pages 309-319, April.
  10. Victor Zarnowitz, 1992. "Rational Expectations and Macroeconomic Forecasts," NBER Chapters, in: Business Cycles: Theory, History, Indicators, and Forecasting, pages 462-491 National Bureau of Economic Research, Inc.
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