FRICTIONS AND THE CONTRIBUTION OF INVENTORY TO SHAREHOLDER WEALTH

type="main" xml:lang="en"> <title type="main">Abstract</title> <p>Shareholder wealth effects associated with inventory are examined. Initial results indicate a positive and significant relation between shareholder wealth and inventory. Additional findings suggest that operating conditions, financial constraints, and working capital behavior influence the value of inventory. These findings are consistent with tactical and strategic decisions influencing managers to hold inventory. Overall, the results suggest that shareholders price the strategic advantages accompanying inventory. </section>