Guariglia, A. and Mateut, S. (2010) 'Inventory investment, global engagement, and financial constraints in the UK : evidence from micro data.', Journal of macroeconomics., 32 (1). 239-250 .
We use a panel of 9381 UK firms to study the links between firms’ global engagement status and their financial health. We estimate inventory investment equations augmented with a financial composition variable, and interpret the sensitivity of inventory investment to the latter as a measure of the strength of the financial constraints faced by firms. We find that smaller, younger, and more risky firms; and firms that do not export and are not foreign owned exhibit higher sensitivities. Moreover, global engagement substantially reduces the sensitivities displayed by the former categories of firms: this suggests that it shields firms from financial constraints.
|Keywords:||Financial constraints, Global engagement, Inventory investment.|
|Full text:||(AM) Accepted Manuscript|
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|Publisher Web site:||http://dx.doi.org/10.1016/j.jmacro.2009.03.001|
|Record Created:||09 Jun 2009 14:50|
|Last Modified:||04 Nov 2011 09:32|
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