capital formation


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Capital formation

Expansion of capital or capital goods through savings, which leads to economic growth.

Capital Formation

The transfer of capital from individuals, organizations, or government for business use. For example, a widget company experiences capital formation when people buy widgets. The company can then use the profit to encourage investment or to expand its operations, among other options. Capital formation is crucial to economic growth.

capital formation

The creation of productive assets that expand an economy's capacity to produce goods and services. Private savings facilitates capital formation by allowing resources to be diverted to corporate investment rather than individual consumption.

capital formation

or

capital accumulation

  1. the process of increasing the internally available CAPITAL of a business by retaining earnings to add to RESERVES.
  2. the process of adding to the net physical CAPITAL STOCK of an economy as a means of increasing the economy's capacity to produce goods and services. INVESTMENT by businesses in new plant and equipment is one important source of capital formation, as is investment by the government in INFRASTRUCTURE (roads, railways, etc.).

capital formation

see CAPITAL ACCUMULATION.
References in periodicals archive ?
The Securities and Exchange Commission announced the agenda and panelists for the 2019 Government-Business Forum on Small Business Capital Formation. The August 14 event will be hosted in partnership with the Heider College of Business at Creighton University and will be held in the Hixon-Lied Auditorium of the Mike and Josie Harper Center on the universitys campus in Omaha, Nebraska.
Also, Philippine Statistics Authority (PSA) data showed that government consumption accounted for only 0.9 percentage point of the second quarter GDP growth, while capital formation or public investments was a drag with minus 2.4 percentage points-meaning the sector contracted during the period.
- The Securities and Exchange Commission today announced the agenda and panelists for the 2019 Government-Business Forum on Small Business Capital Formation. The August 14 event will be hosted in partnership with the Heider College of Business at Creighton University and will be held in the Hixon-Lied Auditorium of the Mike and Josie Harper Center on the university's campus in Omaha, Nebraska.
Gross capital formation, an indicator of the addition of fixed assets in the economy, for Pakistan has consistently been around 15% since the 1970s.
Among the challenges to growth in the first-quarter, Mapa said, were capital formation and the dent in government consumption.
The higher is the rate of down fall of the economy and disequilibrium in the demand and supply ratio; the higher would be the impact of inflationary spiral, which could adversely affect the human development, cost of living and level of capital formation. In addition, when the people of the country will increase their dependability upon smuggled foreign goods, the local industrial productivity will certainly be adversely affected.
Summary: Mumbai (Maharashtra) [India], Apr 4 (ANI): BSE (earlier known as Bombay Stock Exchange) and India International Exchange (India INX) have signed a memorandum of understanding with Moscow Exchange (MOEX) to connect investor community and companies in both countries besides allowing a capital formation platform.
Investments (gross fixed capital formation) account for 20.1% of GDP.
Beltran said that capital formation as a percentage of gross domestic product (GDP) last year rose to 27 percent from 25.1 percent a year before.
Investments contributing more to Philippine economic growth DOF !-- -- Lawrence Agcaoili (The Philippine Star) - February 2, 2019 - 12:00am MANILA, Philippines The economy is becoming more investment-led as the percentage of capital formation to domestic output as measured by gross domestic product (GDP) steadily increased over the past three years.
We did our best to proactively facilitate business growth, accelerate private capital formation, improve access to formal financial products and interlink the capital markets with the real economy.
Global Banking News-September 19, 2018-Ternio, US Capital Global partner to support capital formation needs