@article {65001, title = {Credit Constraints and the Cyclicality of R\&D Investment: Evidence from France}, year = {2007}, note = {WCFIA Working Paper 07-04, August 2007}, month = {Aug 1, 2007}, abstract = {We use a French firm-level panel data set over the period 1993-2004 to analyze the relationship between credit constraints and firms{\textquoteright} R\&D behavior over the business cycle. Our main results can be summarized as follows: (i) the share of R\&D investment over total investment is countercyclical without credit constraints, but it becomes more procyclical as firms face tighter credit constraints; (ii) the result is magnified for firms in sectors that depend more heavily upon external finance; (iii) in more credit constrained firms, R\&D investment share plummets during recessions but does not increase proportionally during upturns; (iv) average R\&D investment and productivity growth are more negatively correlated with sales volatility in more credit constrained firms.}, author = {Aghion, Philippe and Askenazy, Philippe and Berman, Nicolas} }