Credit Constraints and the Cyclicality of R&D Investment: Evidence from France

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Credit Constraints and the Cyclicality of R&D Investment: Evidence from France

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Title: Credit Constraints and the Cyclicality of R&D Investment: Evidence from France
Author: Aghion, Philippe; Askenazy, Philippe; Berman, Nicolas; Cette, Gilbert; Eymard, Laurent

Note: Order does not necessarily reflect citation order of authors.

Citation: Aghion, Philippe, Philippe Askenazy, Nicolas Berman, Gilbert Cette, and Laurent Eymard. 2012. “Credit Constraints and the Cyclicality of R&D Investment: Evidence from France.” Journal of the European Economic Association 10, no. 5: 1001–1024.
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Abstract: We use a French firm-level data set containing 13,000 firms over the period 1994–2004 to analyze the relationship between credit constraints and firms’ R&D behavior over the business cycle. Our main results can be summarized as follows: (i) R&D investment is countercyclical without credit constraints, but it becomes procyclical as firms face tighter credit constraints; (ii) this result is only observed for firms in sectors that depend more heavily upon external finance, or that are characterized by a low degree of asset tangibility; (iii) in more credit-constrained firms, R&D investment plummets during recessions but does not increase proportionally during upturns.
Published Version: doi:10.1111/j.1542-4774.2012.01093.x
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:12490632
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