The Impact of Corporate Inventory Investment on Macroeconomic Fluctuation: Theory and Empirical Evidences

Abstract

Macroeconomic theory holds that there is a close relationship between the volatility of stock and the macroeconomic cycle. The paper calculated the annual variation rate of inventory investment (RII) and the proportion of inventory investment accounted for total assets (RIA) with the annual data of Chinese listed companies through the period of 2007-2013. An empirical study was carried out by combining RII and RIA with the gross domestic product (GDP) and the inflation rate (INF). The results show that there is a positive relationship between the corporate inventory investment and macroeconomic variables in a few years, but the relationship was not significant. There is no significant correlation between the corporate inventory investment and the macroeconomic fluctuation.