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Firm Behaviour And Financial Pressure: Evidence From Spanish Panel Data

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  • Andrew Benito
  • Ignacio Hernando

Abstract

This paper examines responses by firms in Spain to the experience of financial pressure. Using panel data methods applied to a large company panel, a number of aspects of corporate behaviour and the response of each to financial pressure are examined. We consider fixed investment, inventories, employment – distinguishing both permanent and temporary contract employees – and dividend policies. Our results include finding significant effects of financial pressure from borrowing costs on each outcome, particularly investment and employment. The effects on temporary employment are also found to be larger and work through more quickly than on permanent employment.

Suggested Citation

  • Andrew Benito & Ignacio Hernando, 2007. "Firm Behaviour And Financial Pressure: Evidence From Spanish Panel Data," Bulletin of Economic Research, Wiley Blackwell, vol. 59(4), pages 283-311, October.
    • Handle: RePEc:bla:buecrs:v:59:y:2007:i:4:p:283-311
    DOI: 10.1111/j.0307-3378.2007.00266.x
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    References listed on IDEAS

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    6. Renato Faccini, 2014. "Reassessing Labour Market Reforms: Temporary Contracts as a Screening Device," Economic Journal, Royal Economic Society, vol. 124(575), pages 167-200, March.
    7. Fátima Herranz González & Carmen Martínez-Carrascal, 2017. "The impact of firms’ financial position on fixed investment and employment. An analysis for Spain," Working Papers 1714, Banco de España.
    8. Chiara Coluzzi & Annalisa Ferrando & Carmen Martínez-Carrascal, 2009. "Financing obstacles and growth: An analysis for euro area non-financial corporations," Working Papers 0836, Banco de España.
    9. Stéphane Dees & Stefan Gebauer & Thomas Goncalves & Camille Thubin, 2022. "The Financing Structure of NonFinancial Corporations and MacroFinancial Implications in France," Working papers 880, Banque de France.
    10. Luísa Farinha & Pedro Prego, 2013. "Investment Decisions and Financial Standing of Portuguese Firms – recent evidence," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    11. Jean-Charles Bricongne & Aurora Mordonu, 2017. "Interlinkages Between Household and Corporate Debt in Advanced Economies," Open Economies Review, Springer, vol. 28(5), pages 1029-1055, November.
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    13. Chen, Minjia & Guariglia, Alessandra, 2013. "Internal financial constraints and firm productivity in China: Do liquidity and export behavior make a difference?," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1123-1140.
    14. Gebauer, Stefan & Setzer, Ralph & Westphal, Andreas, 2018. "Corporate debt and investment: A firm-level analysis for stressed euro area countries," Journal of International Money and Finance, Elsevier, vol. 86(C), pages 112-130.
    15. Ferrando, Annalisa & Martinez-Carrascal, Carmen, 2008. "The impact of financial position on investment: an anlysis for non-financial corporations in the euro area," Working Paper Series 943, European Central Bank.
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    17. Gebauer, Stefan & Setzer, Ralph & Westphal, Andreas, 2017. "Corporate debt and investment: a firm analysis for stressed euro area countries," Working Paper Series 2101, European Central Bank.
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    19. Zhang, Dongyang & Liu, Deqiang, 2017. "Determinants of the capital structure of Chinese non-listed enterprises: Is TFP efficient?," Economic Systems, Elsevier, vol. 41(2), pages 179-202.

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