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INTRODUCTION

The fixed investment decision is an important decision in the valuation of the firm, attempts were made previously to understand the factors that influence the fixed investment decision of the firm. Such studies have identified different factors which play an important role in the determination of the fixed investment of the companies and the studies made by some of the researchers Ashim et al., (Bonton, 1980), (Gompers et al 1995), (Jorgenson, 1967), (Kuh, 1963), (Krishna et al 1974), (Kishnamurthy, 1975), (Meyer, 1957), (Misra 1984), (Prem Kumar, 1985), (Prasant Kumar Sahoo, 1988), and (Ranganadhan et al 1996) have added significant contributions to this important area of Business Finance.

Though some attempts were made earlier to find out the validity of such contributions in the Indian context, there are very few studies, which tested their applicability at the micro level units on a more comprehensive basis. Hence an attempt is made in this study to understand the different economic variables which influenced the fixed investment of some sample companies in selected industries in India.

OBJECTIVES

Objectives

Being exploratory in character, the present study aims at understanding the fixed investment behaviour of some sample companies in Chemical Industry. This study is undertaken:

To analyze the investment pattern in Gross Fixed Assets of some selected companies in the Chemical Industry in India.

To analyze the investment pattern in Plant & Machinery separately in the above companies of Chemical Industry.

To analyze the determinants of investment in Gross Fixed assets i.e., Gross Block and Plant & Machinery in Chemical Industry.

To analyze the best models, which determine the investment behavior in fixed assets through Stepwise Multiple Regression Analysis.