Empirical Economics

, Volume 51, Issue 1, pp 125–179

Dynamics of investment and firm performance: comparative evidence from manufacturing industries


DOI: 10.1007/s00181-015-0991-2

Cite this article as:
Grazzi, M., Jacoby, N. & Treibich, T. Empir Econ (2016) 51: 125. doi:10.1007/s00181-015-0991-2


This paper investigates the channels linking investment and firm performance in the French and Italian manufacturing industries and proposes a novel methodology to identify investment spikes which corrects for nonlinear size dependence. Using large data sets reporting observed investment from official sources, we provide a systematic comparison of the relation between investment and firm performance across (i) different definitions of investment spikes, our proposed measure and previous ones; (ii) different institutional settings, i.e. France and Italy; (iii) several performance proxies; and (iv) investment types. We show that the failure to account for the scaling relation between investment spikes and firm size can bias such analyses. Moreover, differences also emerge across countries in the way investment spikes translate into future firm performance.


Firm heterogeneity Investment spike Industrial dynamics Corporate performance Capital accumulation Technical change 

JEL Classification

C14 D22 D24 D92 E22 L11 L23 L60 

Supplementary material

181_2015_991_MOESM1_ESM.pdf (69 kb)
Supplementary material 1 (pdf 69 KB)

Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.Dipartimento di Scienze EconomicheUniversità di BolognaBolognaItaly
  2. 2.CES - Centre d’économie de la Sorbonne, Maison des Sciences ÉconomiquesParis Cedex 13France
  3. 3.MaastrichtThe Netherlands
  4. 4.Observatoire Français des Conjonctures ÉconomiquesParisFrance
  5. 5.Sant’Anna School of Advanced StudiesPisaItaly

Personalised recommendations