Uncovering The Myth Surrounding Cash Hoarding And Corporate Capital Expenditures Since 2008

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Rakesh Duggal
Michael Craig Budden


Capital Expenditure, Wealth Maximization, Return on Investment, Cash Hoarding


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.


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