Financial factors and investment in Belgium, France, Germany, and the United Kingdom: A comparison using company panel data

We construct company panel data sets for manufacturing firms in Belgium, France, Germany, and the United Kingdom, covering the period 1978-1989. These data sets are used to estimate empirical investment equations, and to investigate the role played by financial factors in each country. A robust finding is that cash flow and profits terms appear to be both statistically and quantitatively more significant in the United Kingdom than in the three continental European countries. This is consistent with the suggestion that financial constraints on investment may be relatively severe in the more market-oriented U.K. financial system

An exploration of local R&D spillovers in France

This paper is an attempt to assess the existence and magnitude of local research spillovers in France. We rely on the model of an extended production function (Cobb-Douglas and Translog) with both local and neighborhood R&D capital stocks. We estimate this model on 312 employment areas as of 1999, first for the whole economy, then separately for five large manufacturing industries. We find estimates of R&D capital elasticities with respect to productivity which are significant and plausible both within own-area and across neighboring areas, as well as within own-industry but not across different industries.Productivity, R&D, Local R&D Spillovers, Spatial Econometrics

Does innovation stimulate employment? Evidence from China, France, Germany, and The Netherlands

This article tests whether product and process innovations increase employment in three European countries—France, Germany, and The Netherlands—and in the People’s Republic of China on the basis of the same underlying theoretical framework and comparable harmonized micro data. The data pertain to the period 2002–2004 and cover the manufacturing and services industries in the three European countries, and to the period 1999–2006 and only the manufacturing industries in China. Process innovation does not play a significant role, whereas non-innovation-related efficiency improvements in the production of unchanged products tend to reduce employment. In contrast, product innovation stimulates employment, the compensation effect via increased demand dominating the displacement effect. The net effect of product innovation and the net growth in total employment are comparable in the two regions

Investment and business survey : a study on a panel of French industrial firms

The need for study of firm investment behaviour has now become more important in order to assess the effects of economic policies on the potential production and employment, because many changes in economic structures have occured since the beginning of the so-called economic crisis in Western countries. This period can be characterized by the end of fast growth, the entrance of Japan and new industrialized countries of The Far East in the international trade, the instability and the uncertainty affecting monetary and financial markets, the increasing disequilibrium of internal or external balances, the rise of mass unemployment in many countries and the appearance of new technologies concerning the production and the organization of firms.dissertn: Diss. Doct

La hiérarchie des financements des investissements des PME.

The financing hierarchy of the investments in small and medium companies The modern financial theory assumes the existence of a financing hierarchy for the investments because of bankruptcy costs, different tax rates, asymmetric informations or principal-agents relationship in debt contracts. In this study, we try to verify the existence of such a hierarchy of financiang at the level of investments of french small and medium companies during the period 1990-92. The results of the descriptive analysis of the sample showthat the cash-flow remain the preffered source of financing, followed by the debts and then the external resources. We can note that the more the firm invests the more it finances externally, after drying out the internal sources of finance. We also present the results of econometric estimations which confirm the existence of a particular structure of financing for the small and medium companies.La hiérarchie des financements des investissements des PME La théorie financière moderne de l'entreprise suggère l'existence d'une hiérarchie de financement de l'investissement à cause de coûts de faillite, de taxation différentielle, d'asymétrie d'information ou de relation entre l'entreprise et ses créanciers. Dans cette étude, nous tentons de vérifier l'existence d'une hiérarchie de financement au niveau des investissements des petites et moyennes entreprises françaises au moyen de données individuelles sur la période 1990-1992. Les résultats de l'analyse descriptive de l'échantillon montrent que l'autofinan­cement reste la source préférée de financement, suivie par l'endettement et enfin les apports externes. On peut noter que plus l'entreprise investit, plus elle a recours à du financement externe après avoir épuisé les sources internes. Nous présentons également les résultats d'estimations économétriques des déterminants des sources de financement des entreprises qui confirment l'existence d'une structure de financement particulière des petites et moyennes entreprises.Mulkay Benoît, Sassenou Mohamed Najib. La hiérarchie des financements des investissements des PME. In: Revue économique, volume 46, n°2, 1995. pp. 345-363

Une evaluation du credit d’impot recherche en France, 1980-1997

The aim of this article is to evaluate the effect of the cost of R&D capital, and more particularly of the taxcredit on R&D expenditures, introduced in France since 1983, as a fiscal incentive to private R&D. A user cost of R&Dcapital is derived with imperfect capital markets, corporate and shareholders taxation. A special treatment is devoted tothe introduction of the incremental tax credit on R&D expenditures. We propose a decomposition of the user cost ofcapital into four components, which allow us in particular to distinguish two user cost measures with or without theR&D tax credit. We rely on this decomposition to assess the specific effect of the R&D tax credit in the framework ofan econometric mo del estimated on a panel of French Manufacturing firms over the period 1980-1997. The effect of theuser cost on R&D is thus identified by the changes in the tax policies during the estimation period, and more preciselythe changes in the statutory rate of R&D tax credit, and definitions of its floor and ceiling.Although future demand prospects remain the main determinant of firm investment in R&D, we find that the reductionin user cost of R&D capital, mainly induced by the R&D tax credit, has a large significant positive effect. We thusestimate that a permanent increase of the rate of this tax credit by 10 % would lead to a development of R&Dinvestment and capital of 3% to 5.5%, which will correspond to an increase of R&D of the order of 2 to 3.5 times theannual cost of this measure for the government budget. Such effect may seem very large, and our results will have to beconfirmed in future work, in particular on the more recent period, and if possible not only on the basis of the simulatedcost of the R&D tax credit, but also on the basis of data on the actual cost of (which is at the firm level a confidentialinformation).

La hiérarchie des financements des investissements des PME.

[fre] La hiérarchie des financements des investissements des PME. . La théorie financière moderne de l'entreprise suggère l'existence d'une hiérarchie de financement de l'investissement à cause de coûts de faillite, de taxation différentielle, d'asymétrie d'information ou de relation entre l'entreprise et ses créanciers. Dans cette étude, nous tentons de vérifier l'existence d'une hiérarchie de financement au niveau des investissements des petites et moyennes entreprises françaises au moyen de données individuelles sur la période 1990-1992.. Les résultats de l'analyse descriptive de l'échantillon montrent que l'autofinan­cement reste la source préférée de financement, suivie par l'endettement et enfin les apports externes. On peut noter que plus l'entreprise investit, plus elle a recours à du financement externe après avoir épuisé les sources internes. Nous présentons également les résultats d'estimations économétriques des déterminants des sources de financement des entreprises qui confirment l'existence d'une structure de financement particulière des petites et moyennes entreprises. [eng] The financing hierarchy of the investments in small and medium companies. . The modern financial theory assumes the existence of a financing hierarchy for the investments because of bankruptcy costs, different tax rates, asymmetric informations or principal-agents relationship in debt contracts. In this study, we try to verify the existence of such a hierarchy of financiang at the level of investments of french small and medium companies during the period 1990-92.. The results of the descriptive analysis of the sample showthat the cash-flow remain the preffered source of financing, followed by the debts and then the external resources. We can note that the more the firm invests the more it finances externally, after drying out the internal sources of finance. We also present the results of econometric estimations which confirm the existence of a particular structure of financing for the small and medium companies.

An Exploration of Local R&D Spillovers in France

This paper is an attempt to assess the existence and magnitude of local research spillovers in France. We rely on the model of an extended production function (Cobb-Douglas and Trans log) with both local and neighborhood R&D capital stocks. We estimate this model on 312 employment areas as of 1999, first for the whole economy, then separately for five large manufacturing industries. The estimated elasticities of productivity with respect to R&D capital are significant and plausible, both with in own-area and across neighboring areas as well as within own-industry, but they are weaker across different industries.