Understanding changes in corporate profitability, return on capital, return on equity and interest rates

A cross OECD countries from the 1990s to the present , we compare : Corporate profitability; The return on capital; The return on equity; Long-term interest rates. We are interested in divergences between these variables, which ought to evolve in parallel: Profitability and the return on capital are separated by c apital intensity and the relative price of investment (capital goods); The return on capital and the return on equity are separated by i nterest rates and debt leverage; The return on capital and long-term interest rates, which show the most spectacular divergence, may be separated by a corporate debt constraint, which limits corporate investment, or an increase in the corporate risk premium.