Firm-Level Investment in France and the United States: An Exploration of What We Have Learned in Twenty Years

52 Pages Posted: 27 Apr 2000 Last revised: 10 Apr 2001

See all articles by Jacques Mairesse

Jacques Mairesse

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Maastricht University - United Nations and Maastricht Economic Research Institute on Innovation and Technology (UNU-MERIT); National Bureau of Economic Research (NBER)

Bronwyn H. Hall

University of California at Berkeley; National Bureau of Economic Research (NBER); Institute for Fiscal Studies (IFS); Max Planck Institute for Innovation and Competition

Benoit Mulkay

Université de Montpellier 1

Date Written: December 1999

Abstract

Our two related goals in this paper are the following: Firstly and mainly, we want to examine the effects of major changes in modelling strategy and econometric methodology, over the past twenty years, on estimation of firm-level investment equations using panel data. Secondly, we try to assess whether the differences in the estimated investment equations, as between recent years and ten to twenty years go in the French and U.S. Manufacturing industries, are real' and economically meaningful. Thus our paper consists of a series of comparisons: a simple accelerator-profit specification versus one with error correction, traditional between- and within-firm estimation versus GMM estimation, the investment behavior of French firms versus that of U.S. firms, and investment behavior in recent years versus ten to twenty years ago. Although the important econometric advances of the past twenty years have been far from being as successful as we had hoped for, we do find some significant improvement in the specification, estimation and interpretation of firm investment equations; we also fin some real changes in the investment behavior of French and U.S. firms during these twenty years.

Suggested Citation

Mairesse, Jacques and Hall, Bronwyn H. and Mulkay, Benoit, Firm-Level Investment in France and the United States: An Exploration of What We Have Learned in Twenty Years (December 1999). NBER Working Paper No. w7437. Available at SSRN: https://ssrn.com/abstract=202418

Jacques Mairesse (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

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Maastricht University - United Nations and Maastricht Economic Research Institute on Innovation and Technology (UNU-MERIT)

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Bronwyn H. Hall

University of California at Berkeley ( email )

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National Bureau of Economic Research (NBER)

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Benoit Mulkay

Université de Montpellier 1 ( email )

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