The Korean Economic Forum
Characterizing the Stylized Facts of Facility Investment in the Post-crisis Period
Hangyong Lee (Hanyang University)Year 2020Vol. 13No. 1
This paper documents some stylized facts in the facility investment after theglobal financial crisis from the perspectives of cross-section and time-series.First, facility investment rate, machinery and equipment investment rate inparticular, has been declining more rapidly than other OECD countries. Second,facility investment is heavily concentrated in a few industries including electronicmanufacturing. An industry-level cross-section regression shows that price ofcapital goods is a significant determinant of facility investment. Third, theco-movement between facility investment and GDP, estimated in the frequencydomain, is much weaker in the post-global financial crisis period.