Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
966025 | Journal of Macroeconomics | 2010 | 12 Pages |
Abstract
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.
Related Topics
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Authors
Alessandra Guariglia, Simona Mateut,