Dead Money; Corporate Savings  

Oleh:

[s.n]

Jenis: Article from Bulletin/Magazine
Dalam koleksi: The Economist (http://search.proquest.com/) vol. 405 no. 8809 (Nov. 2012), page 67-68.
Topik: Corporate Finance; Trends; Statistical Data; Savings; Capital Expenditures

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE29.74 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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The four worries unnerving business are: the euro-zone crisis; upheaval in the Middle East; a possible recession in China; and America's economic health and "fiscal cliff"--the combination of tax increases and spending cuts scheduled to occur at the end of this year. This is not a new problem. Investment has steadily risen since the recession ended, but not as vigorously as profits. In America, for example, nominal capital expenditure this year (on an annualised basis) has risen by 6% compared with 2007; internal cash flow is up by 32%. Firms in the S&P 500 held roughly $900 billion of cash at the end of June, according to Thomson Reuters, down a bit from a year earlier but still 40% up on 2008. Business leaders and conservative critics cite that cash mountain as proof that meddlesome federal regulations and America's high corporate-tax rate is locking up cash and depressing investment. But that cannot explain why the same phenomenon prevails worldwide. No single factor seems to explain companies' high savings. Falling corporate-tax rates have increased the appeal of capital over labour; heightened uncertainty and capricious funding markets seem a recurring part of the landscape.

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