This project examines the relation between capital expenditure and firm performance under the factor of growth opportunities while economic condition turning bad, using data from the manufacturing firms listed on the Taiwan Stock Exchange. The sample covers 600 firms for period 2005-2009. The result indicates that there is negative relation between capital expenditure and firm performance in the presence of growth opportunities. However, this result is contrast to the evidence from other studies ignoring economic condition turning bad. In the absence of growth opportunities, there is also negative relation between capital expenditure and firm performance. This result is consistent with the researches ignoring economic condition turning bad.
