Investimento Empresarial em Portugal: Crise e Recuperação

Abstract

In this paper we provide a description and tentative explanations for the evolution of business investment in Portugal in recent years. Naturally, the feature that stands out is the abrupt fall in investment after the beginning of the international financial crisis. Net of capital depreciation, private investment actually became negative; only in 2017 did it became positive again. Our analysis suggests that the main driver of investment has been excess capacity relative to demand. Another important element has been the state of producers’ confidence. On the other hand, the cost of capital seems to have had a relatively small role, although indebtedness and the cash flow appear to have some influence on investment decisions. The more dynamic firms are especially sensitive to cash flows. Our analysis also suggests that the last few years have been characterized by high levels of zombie firms, although in 2016 the percentage of zombie firms declined considerably. Another recent piece of good news is the increase of tradable sectors’ share in corporate investment. These elements indicate that the Portuguese economy may be undergoing a process of structural change.