Economics Working Papers, 2026 (vol. 10), issue 2

Macroeconomic Drivers of Corporate Investment in the United Kingdom: A Multivariate Analysis

Djesa Mike

Economics Working Papers 2026, 10(2): 4-61 | DOI: 10.32725/ewp.2026.003  

This study examines the macroeconomic drivers of corporate investment in the United Kingdom using a multivariate time-series framework. Focusing on five key variables—interest rates, inflation, GDP growth, exchange rates, and corporate profits—the analysis investigates their combined effects on aggregate corporate investment using annual data from 1990 to 2022. By concentrating on macroeconomic determinants rather than firm-level factors, the study provides evidence on how monetary and real-sector conditions shape investment behavior in a mature, market-based economy. The contribution of this study lies in integrating long-run macroeconomic...