Firm Listing Status, Firm Size, and the Financing of Investment.

This article examines how French firms finance their investments, focusing on the roles of bank credit, financial debt, equity, retained earnings, and cash holdings, and how these patterns vary by firms’ listing status (public vs. private), size, and the nature of investments (tangible vs. intangible). Using a comprehensive dataset of nearly 177,000 firms over 25 years, the study finds that bank credit is a critical source for financing fixed asset investments, especially for private and smaller firms, while public and larger firms rely more on other financial debt and equity. The contribution of bank credit decreases with firm size, whereas equity and other financial debt increase, with even large private firms using equity significantly. Additionally, intangible investments rely less on bank credit and more on equity, other debt, and residual liabilities (mainly tax and social security contributions), reflecting the limited collateral value of intangible assets. These findings highlight distinct financing behaviors shaped by firm characteristics and suggest implications for understanding investment dynamics in bank-based versus market-based financial systems.