Credit constraints and the cyclicality of R&D investment: Evidence from France

Philippe Aghion (), Philippe Askenazy, Nicolas Berman (), Gilbert Cette and Laurent Eymard
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Philippe Aghion: Department of Economics, Harvard University, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Nicolas Berman: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IZA - Institute for the Study of Labor - IZA, Centre de recherche de la Banque de France - Banque de France
Laurent Eymard: Centre de recherche de la Banque de France - Banque de France

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Abstract: We use a French firm-level data set containing 13,000 firms over the period 1993-2004 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) the share of R&D investment over total investment is countercyclical without credit constraints, but it becomes less countercyclical as firms face tighter credit constraints; (ii) this result is magnified 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 share plummets during recessions but does not increase proportionally during upturns; (iv) average R&D investment and productivity growth are more negatively correlated with sales volatility in more credit constrained firms.

Keywords: cycle des affaires; recherche et développement; contraintes de crédit; volatilité; business cycles; R&D; credit constraints; volatility (search for similar items in EconPapers)
Date: 2008-04
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00586744v1
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Citations: View citations in EconPapers (38)

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Related works:
Journal Article: CREDIT CONSTRAINTS AND THE CYCLICALITY OF R&D INVESTMENT: EVIDENCE FROM FRANCE (2012)
Working Paper: Credit Constraints and the Cyclicality of R&D Investment: Evidence from France (2012)
Working Paper: Credit Constraints and the Cyclicality of R&D Investment: Evidence from France (2012)
Working Paper: Credit Constraints and the Cyclicality of R&D Investment: Evidence from France (2012)
Working Paper: Credit Constraints and the Cyclicality of R&D Investment: Evidence from France (2008)
Working Paper: Credit constraints and the cyclicality of R&D investment: Evidence from France (2008)
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