The impact of financial constraints on innovation: What can be learned from a direct measure?

This paper examines the impact of financial constraints on innovation for established firms. We make use of a direct measure of the existence of financial constraints obtained thanks to a specific survey addressed to French established firms (FIT, Sessi). This is a distinctive feature of this paper as most of previous studies had to rely on proxies (like the cash-flow sensitivity) which may be subject to interpretation problems. The probability to have innovative activities and the probability to face financial constraints are simultaneously estimated by a recursive bivariate probit model. Accounting for the endogeneity of the financial constraint variable, we find that financial constraints significantly reduce the likelihood that firms have innovative activities. The probability to encounter financial constraints is explained by firms' ex ante financing structure and economic performances.Innovation ; Financing constraints ; Recursive bivariate probit.

Stockholding: Does housing wealth matter?

The existence of an equity premium puzzle has been largely emphasized in the empirical literature: one observes low risky assets holding that the standard portfolio choice model (with expected and discounting utility and homothetic preferences) is not able to explain. Besides modifications of rationality assumptions, other changes have been introduced in the standard framework to account for this equity premium puzzle: the existence of transaction costs, liquidity constraints or other risks (e.g. risks associated with employment, income, health,). These background risks (i.e. risks that are unavoidable, exogenous and independent from the financial market risk) may lead households to reduce their stockownership in order to limit their global exposure to risk. Recent developments examine the role of housing on stockholding as another background risk. This paper analyses the empirical link between stockholding and housing wealth within this framework. We use the French wealth survey (Enquête Patrimoine 2004, Insee) that gives us detailed information on households portfolio, socio-demographic variables, and several measures of preference and exposition to various risks (income, unemployment, health, and business). We find that an increase in the housing to net wealth ratio crowds out stock market investment for a given total financial wealth: when facing real estate exposure to risk, households tend to moderate their global exposure to risk by limiting the share of their financial wealth invested in stocks. Among the other significant determinants of the equity premium puzzle, we emphasize the role of transaction and information costs, the attitude toward risk and the exposition to various risks in hampering investments in stocks.Portfolio choice , background risks , housing demand , life-cycle model.

Financing Constraints and a Firm's Decision and Ability to Innovate: Establishing Direct and Reverse Effects.

The paper analyzes the existence and impact of financing constraints as a possibly serious obstacle to innovation by .rms. The econometric framework we employ in our study is the simultaneous bivariate probit with mutual endogeneity of direct indicators of financial constraints and innovation decisions by firms. A novel method for establishing coherency conditions is used. It allows us for the first time to estimate models hitherto classified as incoherent through the use of prior sign restrictions on model parameters. We are thus able to quantify the interaction between financing constraints and a firm's decision and ability to innovate without forcing the econometric models to be recursive. Hence, we obtain direct as well as reverse interaction effects, leading us to conclude that binding financing constraints discourage innovation and at the same time innovative firms are more likely to face binding financing constraints.DSGE model ; Currency union ; Heterogeneity ; Matching frictions ; Welfare.

Is There a Bank lending Channel in France? Evidence From Bank Panel Data.

The aim of this paper is to check the possible existence of a bank lending channel in France. For that purpose, we have estimated a dynamic reduced form model allowing for asymmetries in loan supply across banks, depending on their size, liquidity and capitalization. We have used a panel of 312 French banks observed quarterly over the period 1993-2000. We find some asymmetry between liquid and illiquid banks, the latter being more sensitive to a monetary policy tightening. This result is in accordance with that obtained for several other countries of the Euro area. It constitutes an indication that, as far as they can, French banks sell part of their liquid assets in order to shield their loan portfolio from the effects of increases in the interest rate. Contrary to what has been found for the US (e.g., see Kashyap and Stein (1995, 2000) and Kishan and Opiela (2000)), we do not find the two other banks' characteristics we consider (size and capitalization) to have any significant impact on bank lending.Monetary policy; Credit channel.

Wealth Effects on Consumption Plans: French Households in the Crisis

This paper analyzes the wealth effect on consumption in France by relying on two original household surveys. First, it provides the first estimate of the marginal propensity to consume out of wealth based on micro data for France (Enquête Patrimoine 2009, Insee): a low but significant wealth effect is obtained and financial wealth seems to be significant only for stockholders. Second, it studies how French households have adapted their consumption plans during the 2008-2009 crisis by relying on household self-assessed changes in future consumption (survey PATER). Besides the direct wealth effect, our results confirm the role played by changes in expectations on consumption plans, and thus, by the confidence channel as an additional transmission mechanism of the crisis.wealth effect, housing and financial wealth, consumption, household survey, expectations.

Resistance to Early-Life Stress in Mice: Effects of Genetic Background and Stress Duration

Early-life stress can induce marked behavioral and physiological impairments in adulthood including cognitive deficits, depression, anxiety, and gastrointestinal dysfunction. Although robust rat models of early-life stress exist there are few established effective paradigms in the mouse. Genetic background and protocol parameters used are two critical variables in such model development. Thus we investigated the impact of two different early-life stress protocols in two commonly used inbred mouse strains. C57BL/6 and innately anxious BALB/c male mice were maternally deprived 3 h daily, either from postnatal day 1 to 14 (protocol 1) or 6 to 10 (protocol 2). Animals were assessed in adulthood for cognitive performance (spontaneous alternation behavior test), anxiety [open-field, light/dark box (L/DB), and elevated plus maze (EPM) tests], and depression-related behaviors (forced swim test) in addition to stress-sensitive physiological changes. Overall, the results showed that early-life stressed mice from both strains displayed good cognitive ability and no elevations in anxiety. However, paradoxical changes occurred in C57BL/6 mice as the longer protocol (protocol 1) decreased anxiety in the L/DB and increased exploration in the EPM. In BALB/c mice there were also limited effects of maternal separation with both separation protocols inducing reductions in stress-induced defecation and protocol 1 reducing the colon length. These data suggest that, independent of stress duration, mice from both strains were on the whole resilient to the maladaptive effects of early-life stress. Thus maternal separation models of brain–gut axis dysfunction should rely on either different stressor protocols or other strains of mice

Épargne et choix de portefeuille des ménages : approches micro et macroéconomiques.

Les comportements d’épargne et d’allocation d’actifs des ménages sont des éléments clés pour le financement de l’économie. La récente crise financière et plus structurellement le vieillissement des populations conduisent les banques centrales, le régulateur et les acteurs des marchés à développer les politiques d’éducation financière du public.Choix de portefeuille, épargne, immobilier, retraites.

Les comportements patrimoniaux des ménages en France : évolutions et déterminants entre 2004 et 2010.

À la lumière des informations issues des enquêtes Patrimoine 2004 et 2010 de l’INSEE et des évaluations des comptes nationaux financiers établis par la Banque de France, l’article propose une première analyse des ajustements patrimoniaux des ménages français depuis 2007.épargne, ménages, portefeuilles, immobilier, risques.