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Wealthy companies reluctant to invest
[L’investissement joue à « cash-cash »]

Author

Listed:
  • Elena Stancanelli

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, IZA - Institute for the Study of Labor - Institute for the Study of Labor)

  • Valerie Chauvin

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Guillaume Chevillon

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Odile Chagny

    (Centre Etudes & Prospective - Groupe ALPHA)

  • Hélène Baudchon

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Gael Dupont

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Catherine Mathieu

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Christine Rifflart

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Danielle Schweisguth

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Hervé Péléraux

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Mathieu Plane

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Xavier Timbeau

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Eric Heyer

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Matthieu Lemoine

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Paola Veroni

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Amel Falah
  • Sabine Le Bayon

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

US corporate profit margins have recovered since 2003. It seems they reached a peak in the third quarter of 2004. In Europe, the upturn has been somewhat delayed, but profitability is likely to gather momentum over the next quarters. Corporate investment is still much tentative in Europe, whereas it bounced back in 2003 in the USA. However, in both regions, profit margins have been used to cut indebtedness, distribute dividends or buy shares back, rather than invest. In consequence, corporate balance sheets have strongly improved, thereby reducing risk premiums, and encouraging loans at low costs. Business' wait-and-see stance has benefited bond markets rather than share markets to date.

Suggested Citation

  • Elena Stancanelli & Valerie Chauvin & Guillaume Chevillon & Odile Chagny & Hélène Baudchon & Gael Dupont & Catherine Mathieu & Christine Rifflart & Danielle Schweisguth & Hervé Péléraux & Mathieu Plan, 2004. "Wealthy companies reluctant to invest [L’investissement joue à « cash-cash »]," SciencePo Working papers Main hal-03462271, HAL.
    • Handle: RePEc:hal:spmain:hal-03462271
    DOI: 10.3917/reof.091.0193
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03462271
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