TY - JOUR
T1 - Inventory investment, global engagement, and financial constraints in the UK
T2 - Evidence from micro data
AU - Guariglia, A.
AU - Mateut, S.
N1 - Copyright 2010 Elsevier B.V., All rights reserved.
PY - 2010/3/1
Y1 - 2010/3/1
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?partnerID=yv4JPVwI&eid=2-s2.0-76349083653&md5=df1b3148a8f3e689622c48a9414fd378
U2 - 10.1016/j.jmacro.2009.03.001
DO - 10.1016/j.jmacro.2009.03.001
M3 - Article
AN - SCOPUS:76349083653
SN - 0164-0704
VL - 32
SP - 239
EP - 250
JO - Journal of Macroeconomics
JF - Journal of Macroeconomics
IS - 1
ER -