The object of study is to seek out and analyze factors which affect capacity investment in Korea.
The data use for this study cover 208 firms in Korea for two years. (1977. 1978).
Capacity investment is selected as the dependent variable and eleven models are used for testing hypotheses. Hypotheses testing for this study are as follows.
1. Firm's profitability and growth affect capacity investment greatly and profitability variable is more explanatory than growth variable.
2. If capacity utilization is high capacity variable is more explanatory than profitability variable.
3. Firm's safety affects capacity investment less.
4. In small firm firm's Liquidity affect capacity investment greatly, in large firm firm's liquidity affect capacity investment less.
5. Firm's lagged capacity investment affect current capacity investment greatly.
6. Industry which firm belongs to, affect capacity investment greatly.
