A disaggregated analysis of business investment since the outbreak of the pandemic

Abstract

Rationale Business investment in Spain has proven considerably weak in recent years and is still below pre-pandemic levels. This article analyses investment dynamics in Spain until 2022 drawing on firm-level data from the Banco de España Central Balance Sheet Data Office. Takeaways •The disaggregated data from the Central Balance Sheet Data Office can be used to identify the characteristics of the firms that adjusted their investment patterns the most from the outbreak of the pandemic until 2022. •In this period, firms’ investment decisions became more sensitive to their economic situation (proxied here by their sales and cash flow). •Conversely, the link between firms’ investment decisions and financial position (proxied here by their debt level and debt burden) remained unchanged. •Investment by young firms proved particularly weak in the period analysed, and this led to a narrowing of the positive gap between their investment drive and that of other firms.