Volume 14 • Issue 2 • PP: 13–25 • 2026
Data-Driven Capital Allocation in Manufacturing Firms: An Investment Analytics Study Using Public Panel Data
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This paper evolves a business data analytics approach to capital allocation by exploring how the use of public panel data can aid in estimating, classifying, and profiling strategic firms. The paper examines the claim that lagged market value, capital stock, and growth signals can explain the current investment behavior and hint when the investment activity is unusually high using the public-domain Grunfeld investment data, which has annual observations of major U.S. manufacturing firms. The empirical design is deliberately non-standard as compared to typical forecasting research and it consists of three analytical layers; fixed-effects panel estimation, supervised classification of high-investment periods, and firm-level strategic segmentation. The findings indicate that the growth of lagged investment, lagged capital stock and firm value is highly correlated with the present level of investment, and that machine-learning classifiers offer helpful discrimination of high in-vestment periods. Strategic segmentation exercise also indicates the clear profiles of firms that can be used to prioritize resources and track capital. The value of the paper is two-fold. First, it illustrates how an old, conventional, public data may be re-used as a new business data analytics example to support decision-making. Second, it interprets quantitative results into a managerial advice on capital planning, growth monitoring, and portfolio-style firm evaluation. Accordingly, the paper provides a reproducible submission-ready study that has a different structure than the traditional business intelligence forecasting papers and is more in line with the requirements of strategic financial analysis and data-driven capital allocation.
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References
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