Technology and Costs in International Competitiveness: From Countries and Sectors to Firms
In: Quaderni - Working Paper DSE N° 941
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In: Quaderni - Working Paper DSE N° 941
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Working paper
If the relation between investment and economic growth is well established in the macroeconomic literature, the existence of a similar link at the level of the firm has been challenged by empirical work. This paper investigates the channels linking investment and firm performance in the French and Italian manufacturing industries. It does so by putting forth a novel methodology to identify investment spikes that corrects for size dependence. While maintaining the desired properties of a spike measure, our chosen proxy retrieves the expected relation between investment and firm performance. Ex-ante, more efficient and fast growing firms display a higher probability to invest; in turn, after an investment spike has taken place the group of investing firms shows further gains in performance. Finally, expansionary investment episodes, as proxied by the opening of new plants, have a negative effect on profitability while they are associated with higher sales and employment levels.
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In: NBER Working Paper No. w17711
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In: National Bank of Belgium Working Paper No. 199
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In: Research policy: policy, management and economic studies of science, technology and innovation, Band 52, Heft 10, S. 104871
ISSN: 1873-7625
In: FEEM Working Paper No. 22
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In: Centro Studi Luca d'Agliano Development Studies Working Paper No. 488
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In: CESifo Working Paper No. 10697
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In: Research Policy, Band 51, Heft 7, S. 104533
In: Research Policy, Band 50, Heft 7, S. 104137
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In: Research Policy, Band 46, Heft 5, S. 1020-1038
In: The Journal of Industrial Economics, Band 64, Heft 4, S. 875-907
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This article explores the dynamics of market selection by investigating of the relationships linking productivity, profitability, investment and growth, based on China's manufacturing firm-level dataset over the period 1998-2007. First, we find that productivity variations, rather than relative levels, are the dominant productivity-related determinant of firm growth, and account for 15%-20% of the variance in firms' growth rates. The direct relation between profitability and firm growth is much weaker as it contributes for less than 5% to explain the different patterns of firm growth. On the other hand, the profitability-growth relationship is mediated via investment. Firm's contemporaneous and lagged profitabilities display positive and significant effect on the probability to report an investment spike, and, in turn, investment activity is related to higher firm growth.
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In: Quaderni - Working Paper DSE N° 1006
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