In this paper we look at both the theoretical and empirical behavior of price-cost margins when capital market imperfections affect firms’ markup policies. We present a model of a firm operating in an industry with differentiated products and facing imperfect markets for financing operations....

The UK machine tool industry has mirrored the fortunes of the rest of British industry since the early fifties. The observed decline has been both a part and a result of the weakening manufacturing base. In particular, the UK machine tool industry has suffered badly in the two recessions of the...