Corporate Retained Earnings Shape Regional Financial Capital Flows Inefficiently.
Regional capital expenditures are influenced by how firms access financial capital, with corporate retained earnings playing a key role. The study compares two models to predict regional financial capital flows and finds that corporate retained earnings may be a better predictor than the neoclassical model. This suggests that the traditional model may not always accurately explain how financial capital is allocated in different regions. The findings indicate that the process of allocating financial capital for regional manufacturing investments may not be efficient.