Inventory investment, global engagement, and financial constraints in the UK: Evidence from micro data
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.
Year of publication: |
2010
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Authors: | Guariglia, Alessandra ; Mateut, Simona |
Published in: |
Journal of Macroeconomics. - Elsevier, ISSN 0164-0704. - Vol. 32.2010, 1, p. 239-250
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Publisher: |
Elsevier |
Keywords: | Financial constraints Global engagement Inventory investment |
Saved in:
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