The vast majority of CFOs indicate that their investment plans are quite insensitive to potential decreases in their borrowing costs. Only 8% of firms would increase investment if borrowing costs declined 100 basis points, and an additional 8% would respond to a decrease of 100 to 200 basis points.

Strikingly, 68% did not expect any decline in interest rates would induce more investment.

In addition, we find that firms expect to be somewhat more sensitive to an increase in interest rates. Still, only 16% of firms would reduce investment in response to a 100 basis point increase, and another 15% would respond to an increase of 100 to 200 basis points.

In short, most firms wouldn't invest more if long-term interest rates were lower, and the majority wouldn't invest less as long as those rates weren't more than 300 basis points higher.

A sharp rise in long-term rates over the course of 2013 allowed Sharpe and Suarez to validate these results with follow-up questions asked in the same survey a year later: