Advanced Search
MyIDEAS: Login

Increases in Business Investment Rates in OECD Countries in the 1990s: How Much Can be Explained by Fundamentals?

Contents:

Author Info

  • Florian Pelgrin
  • Sebastian Schich
  • Alain de Serres

Abstract

In several OECD countries, investment rates in the business sector grew strongly in the second half of the 1990s. In some cases, the strength of private investment relative to output growth had raised concerns about the risk of capital overhang and the prospect of a prolonged period of slow capital formation in order to bring investment levels back to more sustainable levels. It is possible that the stock market boom has contributed to a rise of investment demand to an excessive level, not only in the United States, but also in the United Kingdom, Canada, Scandinavia and Greece. The purpose of this paper is to assess the contribution of fundamental determinants to the change in investment in the second half of the 1990s, based on the estimation of panel cointegration equations for gross business investment for 18 OECD countries from 1970 to 1999. In addition to the levels of real GDP and a measure of the cost of capital, the set of explanatory variables includes four alternative ... Dans quelle mesure la hausse des taux d'investissement dans les pays de l'OCDE durant les années 90 peut-elle être expliquée par les fondamentaux? Dans plusieurs pays de l’OCDE, les taux d’investissement du secteur des entreprises ont connu une forte croissance durant la deuxième moitié des années 90. Dans certains cas, la croissance rapide de l’investissement privé comparativement à celle de la production globale avait soulevé certaines inquiétudes concernant le risque d’une sur-accumulation de capital et la perspective d’une période prolongée de faible formation de capital nécessaire pour ramener le taux d’investissement à un niveau plus soutenable. Il est possible que la bulle sur les marchés boursiers ait entraîné un sur-investissement non-seulement aux États-Unis mais aussi au Royaume-Uni, au Canada, en Scandinavie et en Grèce. L’objectif de cette étude est d’évaluer la contribution des déterminants fondamentaux au changement dans l’investissement durant la deuxième moitié des années 90, à partir de l’estimation d’équations de panel pour l’investissement brut du secteur des entreprises dans 18 pays de l’OCDE sur la ...

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.1787/688436342124
Download Restriction: no

Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 327.

as in new window
Length:
Date of creation: 15 Apr 2002
Date of revision:
Handle: RePEc:oec:ecoaaa:327-en

Contact details of provider:
Postal: 2 rue Andre Pascal, 75775 Paris Cedex 16
Phone: 33-(0)-1-45 24 82 00
Fax: 33-(0)-1-45 24 85 00
Email:
Web page: http://www.oecd.org
More information through EDIRC

Related research

Keywords: non-stationary panels; financial development; investment; panel non-stationnaire; développement financier; investissement;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Landon, Stuart & Smith, Constance E., 2009. "Investment and the exchange rate: Short run and long run aggregate and sector-level estimates," Journal of International Money and Finance, Elsevier, vol. 28(5), pages 813-835, September.
  2. Ricardo Adrogué & Martin Cerisola & Gaston Gelos, 2006. "Brazil's Long-Term Growth Performance," IMF Working Papers 06/282, International Monetary Fund.
  3. Aghion, Philippe & Fally, Thibault & Scarpetta, Stefano, 2007. "Credit Constraints as a Barrier to the Entry and Post-Entry Growth of Firms," IZA Discussion Papers 3237, Institute for the Study of Labor (IZA).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:oec:ecoaaa:327-en. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.