This paper is a contribution to the small but growing literature that compares the investment and R&D behavior of … of a simple error-corrected investment model for both ordinary investment and for R&D investment, a model that … incorporates both output (sales or turnover) and cash flow as predictors for investment. Our focus is on two comparisons: France …

We review the changes in modelling strategy and econometric methodology when estimating a firm-level investment … correction, traditional between- and within-firm estimation versus GMM estimation, the investment behavior of French firms versus … that of U.S. firms, and investment behavior today versus ten to twenty years ago. Although the econometric advances have …

causal relationship among sales and cash flow on the one hand and investment and R&D on the other, using three large panels … investment and R&D are more highly sensitive to cash flow and sales in the United States than in France and Japan. Corresponding …, both investment and R&D predict both cash flow and sales positively in the United States, while the impact is somewhat more …