The term is used in both business administration and economics. In business administration, the term "investment" is associated with corporate investment decisions. In economics, the term "investment" is associated with the  investment behavior of all economic agents. For investments by private households as part of personal household budgeting, the term capital investment is more common.

What the term investment stands for within the investment definition

  1. A long-term (strategically) oriented acquisition of various assets.
  2. Financial investments include equity rights such as stocks or other company holdings, as well as creditor rights such as bonds or loans. Unlike a strategic corporate holding, a financial investment is driven primarily by financial motives. In German-speaking countries, the investment definition is mostly applied in this second meaning, as a capital investment.
Investment definition

Distinguishing the term within the investment definition

Within the investment definition, investments are also distinguished by further criteria. They can be distinguished by their object or by their purpose.

I. Distinction by object

  1. Tangible investments - Physical investments can be: investments in technical equipment, investments in structures and buildings, investments in land and land rights, investments in machinery or even in works of art.
  2. Intangible investments - Intangible investments can be: concessions, licenses, trademarks, patents, protective rights, purchasable knowledge, research and development.
  3. Financial investments - Financial investments can be: investments in stocks, investments in bonds or investments in investment certificates and in equity stakes.

2.. Distinction by purpose

  1. Start-up investments: This type of investment serves, for example, to found a company.
  2. Replacement investments: These are investments made to replace capital goods that have worn out in the production process.
  3. Reinvestments: These are investments that arise from wear and tear or from technological progress. The aim of these investments is to maintain production capacity.
  4. Expansion investments: These investments serve not only to maintain capacity but also to expand it. This is achieved, for example, by investing in hiring more workers or in buying new machines.
  5. Rationalization investments: These are investments meant to ensure that production is increased. To increase production, you invest in new processes or specialized personnel in order to streamline production processes.
  6. Divestments: Divestment means selling means of production in order to generate proceeds. At first glance, "divestment" seems to be the opposite of investment. But it isn't. The proceeds generated through a divestment can later be invested, for example, in modernizing or streamlining the company. You can also use the proceeds to buy new licenses or file patents. You can also use the proceeds to buy shares in another company.