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Dynamics of investment and firm performance: comparative evidence from manufacturing industries

Listed author(s):
  • Marco Grazzi

    (UNIBO - Università di Bologna [Bologna])

  • Nadia Jacoby

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Tania Treibich

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique, Maastricht University [Maastricht])

This paper investigates the channels linking investment and firm performance in the French and Italian manufacturing industries and proposes a novel methodology to identify investment spikes which corrects for nonlinear size dependence. Using large data sets reporting observed investment from official sources, we provide a systematic comparison of the relation between investment and firm performance across (i) different definitions of investment spikes, our proposed measure and previous ones; (ii) different institutional settings, i.e. France and Italy; (iii) several performance proxies; and (iv) investment types. We show that the failure to account for the scaling relation between investment spikes and firm size can bias such analyses. Moreover, differences also emerge across countries in the way investment spikes translate into future firm performance.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-01241664.

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Date of creation: 2015
Publication status: Published in Empirical Economics, Springer Verlag, 2015, pp.1-55. <10.1007/s00181-015-0991-2>
Handle: RePEc:hal:cesptp:halshs-01241664
DOI: 10.1007/s00181-015-0991-2
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01241664
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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