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  • Thumbnail for Capital Investment as a Predictor of Revenue Growth in the Materials and Information Technology Sectors
    Capital Investment as a Predictor of Revenue Growth in the Materials and Information Technology Sectors by Keene, Thomas C., Jr.

    Research about drivers of revenue growth or other firm-specific metrics has been studied, but no research has focused on the impact of capital investment as the primary driver of revenue growth. In this paper, we test the hypothesis, “capital investment positively affects revenue growth, and affects young sectors to a greater extent than mature sectors.” We use cross sectional time series GLS for both sectors and find evidence to partially support the claim. We find that there is positive correlation between capital investment and revenue growth for the S&P 500 Materials sector whereas capital investment is not a significant predictor of revenue growth for the S&P 500 Information Technology sector.