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| Author: | Brown, W. Haegler, U. |
| Title: | Financing constraints and inventories |
| Journal: | European Economic Review
2004 : OCT, VOL. 48:5, p. 1091-1123 |
| Index terms: | Inventory control Financial regulation Corporate finance Models |
| Language: | eng |
| Abstract: | This article addresses the impact of financing constraints (henceforth as: fin-constrs.) on firms inventory and cash management. The empirical regularities, e.g. the excess variance result and counter-cyclicality and persistence of the inventory-sales ratio, and their connection to fin-constrs are being analysed. The findings show that the presence of fin-constrs can explain the excess variance of production in a model otherwise not delivering this result. The fin-constrs also contribute to the counter-cyclicality and persistence of the inventory-sales ratio when demand is positively serially correlated. |
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