We analyze the determinants of capital expenditures and R&D outlays in a large sample of 1.200 listed Japanese companies over the 1985-2004 period. We provide empirical evidence for the role of cash flow as a determinant of both types of investment. In contrast to earlier studies such as Hoshi et al. (1991), our findings suggest that the investment behavior of keiretsu members is not different from unaffiliated companies.
The presentation is co-authored with Burcin Yurtoglu
Jörg Mahlich graduated in Economics from the University of Kiel and has a PhD degree in Economics from the University of Vienna. He is now at the Economic Policy Department of the Austrian Federal Economic Chamber in Vienna.