Économie et Statistique n° 341-342 - Investment and Financing of Firms
Corporate Investment and Financial Constraints in France and the United States
The purpose of this paper is twofold. Firstly, it reviews developments in the strategy for modelling and estimating investment using individual company data. Secondly, it compares corporate investment behaviour in France and the United States over the two estimation periods (1971-1979 and 1985-1993). The main finding of this comparison is that demand remains the key investment determinant in both countries, whereas the profit rate is thought to have played a lesser role in recent years than in the 1970s. The lesser effect of profit is much more marked and seems more entrenched in France than in the United States. French companies would therefore seem to be less financially constrained than their American counterparts.