On average, companies used to reinvest 20 cents of each dollar of their operating returns into their businesses; that amount has dropped by half—to just 10 cents of each dollar since 2002.”

“There are multiple factors driving corporations to reduce their level of reinvestment, including the growth of market concentration—and thus market power—across the economy, which reduces the need for companies to invest in order to compete (Gutierrez and Phillipon 2016; Steinbaum, Bernstein, and Sturm 2018).”

empirical