The Impact of Macro-Economic Indicators on Corporate Investment Decisions. A Financial Management Approach

  • Jamal VALIPOUR Department of Management, Financial Management, Azad University, Tehran, Iran
  • Zahra NAJAFABADIPOUR Department of Business Management, Faculty of Management, Islamic Azad University, Firoozkooh, Iran
  • Samira MOHAMADI Department of Business Administration, Santamonica Training Academy, Hermes elm Gostar Institute, Esfahan, Iran
  • Pourya ZAREEIHEMAT Department of Business Management, Faculty of Management, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran
  • Hero ISAVI Faculty of Management, Islamic Azad University, Branch of Urmia, Iran

Abstract

This study investigates the impact of key macroeconomic indicators - including inflation, interest rates, and economic growth - on corporate investment decisions across three major industries: technology, automotive, and energy. Utilizing quarterly data from 2019 to 2024 and applying econometric techniques such as Vector Autoregression (VAR) and Impulse Response Functions (IRFs), the analysis explores how these macroeconomic shocks influence investment behavior. The results reveal that economic growth above the 3% threshold significantly boosts investment in the automotive sector. Conversely, a 1% increase in interest rates leads to a sharp short-term decline in investment within the technology sector, highlighting its sensitivity to monetary tightening. Additionally, the energy sector exhibits a marked reduction in investment levels when inflation exceeds 5%, reflecting the adverse effects of rising input costs and economic uncertainty. These findings underscore the critical role of macroeconomic conditions in shaping investment strategies, particularly in capital-intensive industries.

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Published
2025-06-30
How to Cite
VALIPOUR, Jamal et al. The Impact of Macro-Economic Indicators on Corporate Investment Decisions. A Financial Management Approach. Theoretical and Practical Research in Economic Fields, [S.l.], v. 16, n. 2, p. 399-406, june 2025. ISSN 2068-7710. Available at: <https://journals.aserspublishing.eu/tpref/article/view/8931>. Date accessed: 07 july 2025. doi: https://doi.org/10.14505/tpref.v16.2(34).10.