Track: Business Management

Abstract

With the engagement of advanced technology in the civil engineering industry, automation and prefabrication of fixed assets is in huge demand. Fixed assets stand as integral components for the operational efficacy of firms, which in return helps in the growth of that whole industry. The primary objective of this study is to find the determinants of investment in Fixed Assets in the Construction Industry. The study has considered five construction companies selected on the basis of their age, profitability, and paidup capital. The stepwise multiple regression models; addition model, constant model, and elimination model, have been employed to analyze and check the robustness of the results. The study results align with empirical findings, highlighting the significance of profit in business investment choices. The Stock of Net Liquidity plays a more important role in the investment, followed by Gross Internal Funds and Change in Sales. Retained earnings impact investments, while dividends influence external funding inflow, and earnings affect dividends. Profits have direct and indirect effects on investments through retained earnings and external finance. It's essential to balance dividend pay-outs to safeguard substantial profits, given the substantial role retained earnings play in investment decisions. The novelty of this study will provide valuable insights to understand how to control various factors in order to increase fixed assets through investments and in return, grow the firm.

Keywords— Construction Industry, Fixed Assets, Investment Behaviour, Multiple Regression Analysis.