Inventory Investment, Global Engagement, and Financial Constraints in the UK: Evidence from Micro Data

Guariglia, A.; Mateut, S.

doi:10.1016/j.jmacro.2009.03.001

Inventory Investment, Global Engagement, and Financial Constraints in the UK: Evidence from Micro Data

Guariglia, A.; Mateut, S.

Authors

A. Guariglia

S. Mateut

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.

Citation

Guariglia, A., & Mateut, S. (2010). Inventory Investment, Global Engagement, and Financial Constraints in the UK: Evidence from Micro Data. Journal of Macroeconomics, 32(1), 239-250. https://doi.org/10.1016/j.jmacro.2009.03.001

Journal Article Type	Article
Publication Date	Mar 1, 2010
Deposit Date	Jun 9, 2009
Publicly Available Date	Jun 9, 2009
Journal	Journal of Macroeconomics
Print ISSN	0164-0704
Publisher	Elsevier
Peer Reviewed	Peer Reviewed
Volume	32
Issue	1
Pages	239-250
DOI	https://doi.org/10.1016/j.jmacro.2009.03.001
Keywords	Financial constraints, Global engagement, Inventory investment.
Public URL	https://durham-repository.worktribe.com/output/1528761