Asymmetric Investment Rates
Charles A. Dice Working Paper No. 2022-03
129 Pages Posted: 13 Apr 2022
Date Written: April 12, 2022
Integrating national accounting with financial accounting, we provide firm-specific estimates of current-cost capital stocks for the entire Compustat universe, as well as an array of estimates of investment flows, economic depreciation rates, and capital and investment price deflators. The firm-level current-cost investment rate distribution is heavily right-skewed, with a small fraction of negative investment rates, 5.51%, but a huge fraction of positive investment rates, 91.64%. Despite a tiny fraction of inactive investment rates, 2.85%, firm-level investment also seems lumpy, featuring a fraction of 32.66% for positive spikes (investment rates higher than 20%). For a typical firm, 39% of total investment is completed within 20% of the sample years.
Keywords: Asymmetry, lumpy investment, national accounting, financial accounting, economic depreciation, current-cost capital, the investment rate
JEL Classification: D22, D25, E22, E44, G12, G31
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