Inventory Investment and the Cost of Capital
of a higher depreciation rate, which makes inventory riskier than fixed capital. In support of this result, our empirical work documents that risk premia, rather than real interest rates, are negatively related to future inventory growth. This relation is highly significant and robust to a number of variations in estimation method, inventory type, and risk premia proxy. Furthermore, the effect is stronger for durable goods, whose sales are highly procyclical, than for nondurables, and for industries whose sales are more procyclical.
Year of publication: |
2009
|
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Authors: | Tuzel, Selale ; Jones, Christopher S. |
Institutions: | Society for Economic Dynamics - SED |
Saved in:
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