The cyclical behaviour of inventories: European cross-country evidence from the early 1990s recession
Authors: Bagliano, Fabio C.; Sembenelli, Alessandro
Source: Applied Economics, Volume 36, Number 18, October 10, 2004 , pp. 2031-2044(14)
Abstract:This paper employs data for a panel of firms from France, Italy and the UK to study the effect of the recession of the early 1990s on inventory investment, controlling for cyclical fluctuations at the firm level. The results clearly show some common patterns across countries, pointing to the relevance of financial factors (namely, the level of leverage) in propagating initial recessionary shocks. Moreover, Italian firms, especially if 'small and young', seem more likely to suffer from a reduction in the value of collateralizable assets possibly originated by restrictive policy actions.
Document Type: Research Article
Publication date: October 1, 2004