Impact of the COVID-19 Pandemic on Corporate Investment Activity in the United States

Prior to the beginning of the research work, 6 main tasks were formed that would allow us to prepare a comprehensive answer to the question of how the crisis caused by COVID-19 affected the behavior of corporate investment in the United States in an aggregated form, as well as at the level of individual industries of the economy: 1. Evaluate the theory of corporate investment and the main models that are used to predict and work with them. 2. Determine what factors are the corporate investments of companies in a crisis. 3. To assess the impact of the 2020 crisis caused by the COVID-19 epidemic on the world and the economy in general and the United States in particular. 4. Analyze recent data on US corporate investment and the applicability of standard methods for predicting corporate investment. 5. Conduct a comparative analysis of data on corporate investment in the United States and draw a conclusion about which industries had an investment shock in 2020, comparing this with data on the 2008 crisis. 6. Analyze the standard behavior of corporate investment in certain sectors of the US economy, and whether it has changed in 2020 as a result of the crisis. First, after evaluating the theory of corporate investment and the main models that are used in it, it was concluded that the Q Tobin theory looks more suitable in the context of investment forecasting. The main patterns of corporate investments of companies in the context of the crisis were also identified: * The growth of investment by companies is related to the growth of operating profit in the recent period, as well as to the growth of stock returns. * The relationship between investments and changes in interest rates, and volatility in the stock market is weak. * Evidence that corporate investment is falling after shocks due to increasing uncertainty is weak. * Contrary to the idea that changes in the Fed's interest rates have a primary impact on corporate investment, there is no evidence that investment growth slows after increases in long-term and short-term interest rates. * High investment performance (shocks) usually correspond to profit shocks or bad news for the market. This was followed by an assessment of how the 2020 crisis caused by the COVID-19 epidemic affected the economy. The COVID-19 pandemic has caused a global economic shock of enormous proportions at a rapid rate, leading to sharp downturns in many countries. The pandemic and its associated mitigation measures have severely limited consumption and investment, as well as limited labor supply and production. In the practical part of the work, data on US corporate investments were analyzed. As a result, according to them, the crisis had a serious impact on the US economy, and it is impossible to say which was the stronger factor: the pandemic itself or the reaction to it. Tobin's Q scores were abnormally high compared to the period 1971-2020. Obviously, the crisis of 2020 is different from most previous shocks, but based on the results of the study, even in relation to this crisis, we can use the Tobin Q theory, which predicted the falls and ups of corporate investment for the 1st quarter before the official data in the US during the shocks. According to the constructed model of data analysis of corporate investment in the US economy, the hypothesis that corporate investment will decline in the industries most affected by the crisis (services, travel, transport, and fuel) was mostly not true. Finally, the paper analyzes the standard behavior of corporate investments in certain sectors of the US economy. The study also found that the industries affected by the crisis do not overlap in any way with the crisis of 2008. It was found that in 3 out of 4 areas of the economy affected by the crisis, the crisis of 2020 not only greatly affected the amount of capital expenditures of companies, but also deviated the behavior of these areas from their standard behavior in the 21st century.