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

By Philippe Aghion, Philippe Askenazy, Nicolas Berman, G. Cette, L. Eymard. 2012

653 citations recorded by the source corpus.

We use a French firm-level panel data set over the period 1993-2004 to analyze the relationship between credit constraints and firms' RD (ii) the result is magnified for firms in sectors that depend more heavily upon external finance; (iii) in more credit constrained firms, RD (iv) average R&D investment and productivity growth are more negatively correlated with sales volatility in more credit constrained firms.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/dc7e2317fc3cfd3ad5c8c32a2cc2e994dede364a

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Citations in the corpus

Innovative Capability and Financing Constraints for Innovation: More Money, More Innovation? (2012, neutral): “As an alternative, Aghion et al. (2008) identify a firm to be constrained if it has failed to repay a trade credit in the previous year.”
Financial Frictions and the Great Productivity Slowdown (2017, background): “It could also be that firms’ productivity in trade-intensive sectors in export-oriented countries may have suffered more than others from the trade slowdown after the crisis (Alcalá and Ciccone, 2004).”
The Decision to Import Capital Goods in India : Firms’ Financial Factors Matter (2012, neutral): “Aghion et al. (2008) alternatively use measures of firms’ payment incidents for France to analyze the relation between credit constraints and research and development along the business cycle.”
R&D and innovation after COVID-19: What can we expect? A review of prior research and data trends after the great financial crisis (2020, background): “Schumpeterian growth models imply countercyclical R&D investment over the business cycle (Aghion et al., 2012), with economic crises creating the conditions for new innovation by lowering factor prices and creating a stock of idle resources (Schumpeter, 1934).”
Green credit policy and firm performance: What we learn from China (2021, background): “Credit policies have different impacts on firms with various characteristics (Aghion et al., 2012).”
Financing constraints and investments in R&D: Evidence from Indian manufacturing firms (2015, positive): “By undertaking such an exercise, we contribute to a recent debate about the cyclicality of R&D (see Aghion et al 2012, Barlevy, 2007).”
Financial Constraints in China: Firm-Level Evidence (2010, background): “By constrast the Sargan test rejects the validity of our instruments for state and foreign firms, a problem encountered also in previous work emphasizing the weakness of IV instruments in this kind of estimations (Aghion et al. 2008).”
Schumpeter meeting Keynes: A policy-friendly model of endogenous growth and business cycles (2010, background): “34 On the negative links between macroeconomic volatility, R&D investment, and long-run economic growth in presence of financial market imperfections, see also Aghion et al. (2008, 2010). G. Dosi et al. / Journal of Economic Dynamics & Control 34 (2010) 1748–1767 1763”
The impact of financial constraints on firm survival and growth (2007, background): “Hence, for instance, Demirguc-Kunt and Maksimovic (1998) and Beck et al. (2005b) find that financial development eases the obstacles firms face to grow faster and therefore improves macroeconomic performance.”
The impact of R&D subsidies during the crisis (2015, background): “Aghion et al. (2010, 2012) and Bovha-Padilla (2009) find evidence that credit constrained firms reveal a higher share of R&D investment during periods of flourishing sales, underpinning the hypothesis of pro-cyclicality.”