Firm-level micro data on the manufacturing industries of Japan, the US and France are analyzed in order to clarify the characteristics, if any, of Japanese investment behavior. According to our estimation of the investment equation, investment by Japanese firms is more constrained by cash flow than those of the US and French firms. It is also shown that the US firms are sensitive to firm specific factors affecting profitability. On the contrary, the Japanese firms tend to respond to economy-wide factors. Moreover, we didn't find any supporting evidence for corporate behaviors specific to Japan, such as yokonarabi (herd behavior) and long-term perspective of management.
