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Inventory investment, global engagement, and financial constraints in the UK : evidence from micro data.

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 .

Abstract

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.

Item Type:Article
Keywords:Financial constraints, Global engagement, Inventory investment.
Full text:PDF - Accepted Version (112Kb)
Status:Peer-reviewed
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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