NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Financial Factors and Investment in Belgium, France, Germany and the UK:A Comparison Using Company Panel Data

Stephen Bond, Julie Elston, Jacques Mairesse, Benoit Mulkay

NBER Working Paper No. 5900
Issued in January 1997
NBER Program(s):   PR

We construct company panel datasets for manufacturing firms in Belgium, France, Germany and the UK, covering the period 1978-89. These datasets are used to estimate a range of empirical investment equations, and to investigate the role played by financial factors in each country. A robust finding is that cash flow or profits terms appear to be both statistically and quantitatively more significant in the UK than in the three continental European countries. This is consistent with the suggestion that financial constraints on investment may be relatively severe in the more market-oriented UK financial system.

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Document Object Identifier (DOI): 10.3386/w5900

Published: Published as "Investment and Tobin's Q: Evidence from Company Panel Data", JE, Vol. 51, nos. 1-2 (1992): 233-258.

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