Template-type: ReDIF-Paper 1.0
Author-Name: Benoit Mulkay
Author-Workplace-Name:Universite des Antilles et de la Guyane
Author-Name:Bronwyn H. Hall
Author-Workplace-Name:Dept of Economics, UC Berkeley
Author-Name:Jacques Mairesse
Author-Workplace-Name:INSEE-CREST
Title:Firm Level Investment and R&D in France and the United States: A Comparison
Abstract:
 This paper is a contribution to the small but growing literature that compares the investment and R&D behavior of manufacturing
 firms in large developed countries that have varying financial and capital market institutions.  Specifically, we look at two similar samples
 of French and United States firms during the period 1982-1993.  We estimate a dynamic specification of a simple error-corrected investment model
 for both ordinary investment and for R&D investment, a model that incorporates both output (sales or turnover) and cash flow as predictors for investment.
 Our focus is on two comparisons: France versus the United States and physical investment versus R&D investment.  In general, we do not find any significant differences between the two
 countries in the long run effects of demand (output) on investment.  However, we do find that cash flow or profits appear to have a much larger impact on both R&D and investment in the U.S.  Except
 for the well-known difference in the serial correlation of the two types of capital spending, we reject any signficant differences between investment and R&D behavior for each country; the major
 differences are between countries.
Keywords: Investment, R&D, financing constraint, liquidity constraint, cash flow sensitivity, international comparison
Length:47pages
Creation-Date: 2001-01-25
Number:2001-W2
File-URL:http://www.nuff.ox.ac.uk/Economics/papers/2001/w2/dbb10.pdf
File-Format: application/pdf
Handle: RePEc:nuf:econwp:0102