Credit Constraints and the Cyclicality of R&D Investment: Evidence from Micro Panel data
Journal article: 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.
Author(s)
Philippe Aghion, Philippe Askenazy, Nicolas Berman, Gilberte Cette, Laurent Eymard
Journal
- Journal of the European Economic Association
Date of publication
- 2012
Keywords JEL
Keywords
- Business cycles
- R&D
- Credit constraints
- Volatility
Pages
- 1001-1024
URL of the HAL notice
Version
- 1
Volume
- 10