Dynamics of investment and firm performance: comparative evidence from manufacturing industries

Marco Grazzi, Nadia Jacoby () and Tania Treibich
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Nadia Jacoby: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper investigates the channels linking investment and firm performance in the French and Italian manufacturing industries and proposes a novel methodology to identify investment spikes which corrects for nonlinear size dependence. Using large data sets reporting observed investment from official sources, we provide a systematic comparison of the relation between investment and firm performance across (i) different definitions of investment spikes, our proposed measure and previous ones; (ii) different institutional settings, i.e. France and Italy; (iii) several performance proxies; and (iv) investment types. We show that the failure to account for the scaling relation between investment spikes and firm size can bias such analyses. Moreover, differences also emerge across countries in the way investment spikes translate into future firm performance.

Keywords: Firm heterogeneity; Investment spike; Industrial dynamics; Corporate performance; Capital accumulation; Technical change (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

Published in Empirical Economics, 2015, pp.1-55. ⟨10.1007/s00181-015-0991-2⟩

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Related works:
Working Paper: Dynamics of investment and firm performance: comparative evidence from manufacturing industries (2015)
Working Paper: Dynamics of Investment and Firm Performance: Comparative evidence from manufacturing industries (2013)
Working Paper: Dynamics of Investment and Firm Performance: Comparative Evidence from Manufacturing Industries (2013)
Working Paper: Dynamics of Investment and Firm Performance: Comparative evidence from manufacturing industries (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01241664

DOI: 10.1007/s00181-015-0991-2

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