Korean Inc.'s capex gains for the first time in 3 yrs after corporate tax rate cut

Capital expenditures from South Korean companies expanded 7.1% in 2020, the first rise in three years after the cut in effective corporate tax rate. The capex fell 2.3% and 6.6%, respectively in 2018 and 2019 when the average effective corporate tax rate, respectively, rose to 18.4% and 19.7%. It was shaved to 18.8% in 2020. The Korea Economic Research Institute reasoned a 1%p fall in effective corporate tax rate can result in a 6.4% increase in capex.

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