What is Capital Accumulation?

Capital Accumulation is the act of acquiring more assets which will generate more profits or other benefits to the company or economy.

Capital accumulation is sometimes discussed in relation to rumors that a company is preparing to acquire another company. This could be the case for one or two reasons. One would be that the company has actually been buying up shares in the target company for some time.

Another would be that the acquiring company has been building up cash and other assets that can be used to acquire or merge with the target company. Capital investments are those which defer the consumption of revenue in favor of projects for which a company or society will be rewarded over time.

Capital Accumulation is the amassing of such assets. This term often applies on a larger scale than just one company, such as the economies of developing nations. The accumulation of capital means that infrastructure is building up to facilitate a healthy capitalistic economy.

On a microeconomic level, capital accumulation can be found in the savings and investment accounts of individuals.