Capital Expenditure Dynamics in ASEAN: Unveiling Determinants and The Impact of The COVID-19 Pandemic on Non-Financial Corporations

This study investigates the intricate determinants influencing the capital expenditure behavior of Non-Financial Corporations (NFCs) in major ASEAN countries over the past decade. Employing a fixed effect panel analysis encompassing 1,488 NFCs in Indonesia, Malaysia, Thailand, and the Philippines, our study unveils a robust and statistically significant relationship between corporate financial performance and capital expenditure. Notably, indicators such as profitability, market value, and cash flow rate demonstrate a positive association with heightened capital expenditure. Furthermore, macroeconomic conditions and policy-related variables emerge as influential factors affecting capital expenditure decisions. Stringent financial conditions tend to hamper firm investment decisions, whilst interest rate tends to exhibit limited efficacy in eliciting the anticipated impact on NFCs capex level. We also report that during the COVID-19 pandemic, most of our earlier findings remain consistent.