Regression analysis reveals a significant positive relationship between capital expenditure and profitability in South Korean electronics firms, indicating investment efficiency.
This study investigates the relationship between capital expenditure (CAPEX) and long-term corporate profitability in South Korea’s electronics industry. Using panel data from 126 listed electronics firms covering 2005–2019, the research applies fixed-effects regression analysis to examine how CAPEX influences profitability, measured by EBITDA/total assets. The results confirm that CAPEX exerts a positive and statistically significant long-term effect on profitability, with stronger but not significantly different impacts for large firms compared to SMEs. The findings contribute to empirical evidence on capital investment efficiency and the implications of economies and diseconomies of scale in capital-intensive industries.
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Park et al. (2025) studied this question.
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