Business investment - drivers,

Business investment is one of the drivers of productivity growth, which sharply declined and has been slow to recover in Scotland and the UK since the global financial crisis (GFC). [...] Overall, the evidence indicates that the impacts of business investment and factors that affect it are heterogenous: depending on the combination of firms’ contexts and characteristics, the same factors might work differently for different firms, influence to a different degree and produce different levels of impact. [...] The exact causes of the productivity puzzle remain unclear,8 although one of the frequently cited explanations is business investment levels due to their recognised link to productivity.9, 10,11 Business investment levels and their links to productivity are of particular interest to policy makers as a potential intervention for fixing market failures: the UK and Scotland have some of the lowest bu. [...] The evidence from both business investment Simple one-size-fits-all narratives are impacts and factors shows that there is unlikely to be helpful in the context of this heterogeneity of firm contexts and markets, which heterogeneity, which is likely to require an has implications for how investments are made, understanding of both the diversity of the the range of factors which are considered in b. [...] productive investment.67 From a methodology point of view, firm-level SE can employ two business investment studies tend to use several measures of business measures: investing Yes/No and the level investment: probability of making the investment of investment in £ which, to account for in a given year (Yes/No) and investment business size differences, could be expenditure as a measure of intensit.