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Inventory investment and sectoral characteristics in some OECD countries

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  • Chikán, Attila
  • Kovács, Erzsébet
  • Matyusz, Zsolt

Abstract

This paper discusses the effects of sectoral structure on the long run macroeconomic inventory behaviour of national economies. Data on 15 OECD countries are included in the analysis, which is based on correlation and cluster analysis methodologies. The study is part of a long-term research project exploring factors influencing the inventory behaviour of national economies. First, we introduce some basic characteristics of macroeconomic inventory formation in the 15 OECD countries. We argue that our previous results on the existence of specific characteristic features of macroeconomic inventory investment are justified, hence it makes sense to study the factors influencing these features. We then examine the contribution of various sectors to the production of in the countries involved and the relationship between sectoral structure and inventory intensity (annual inventory change/Gross Value Added). We find that the high share of agriculture and manufacturing increases inventory intensity, that the increasing share of services has a negative effect and that the role of construction and trade is not obvious. The relatively low stability of the statistical results warns us to be cautious with our judgements. Further, case-by-case analysis would be required to obtain more solid results.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Production Economics.

Volume (Year): 133 (2011)
Issue (Month): 1 (September)
Pages: 2-11

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Handle: RePEc:eee:proeco:v:133:y:2011:i:1:p:2-11

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Web page: http://www.elsevier.com/locate/ijpe

Related research

Keywords: National inventories Inventory investment Gross value added Macroeconomic factors Sectoral structure;

References

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  1. Chikan, Attila & Kovacs, Erzsebet & Tatrai, Tunde, 2005. "Macroeconomic characteristics and inventory investment: a multi-country study," International Journal of Production Economics, Elsevier, vol. 93(1), pages 61-73, January.
  2. Brad R Humphreys & Louis J Maccini & Scott Schuh, 1997. "Input and Output Inventories," Economics Working Paper Archive 391, The Johns Hopkins University,Department of Economics.
  3. Irvine, F. Owen, 2003. "Long term trends in US inventory to sales ratios," International Journal of Production Economics, Elsevier, vol. 81(1), pages 27-39, January.
  4. Chikán, Attila & Kovács, Erzsébet, 2009. "Inventory investment and GDP characteristics in OECD countries," International Journal of Production Economics, Elsevier, vol. 118(1), pages 2-9, March.
  5. Lovell, Michael C., 1994. "Researching inventories: Why haven't we learned more?," International Journal of Production Economics, Elsevier, vol. 35(1-3), pages 33-41, June.
  6. Irvine, F. Owen, 2005. "Trend breaks in US inventory to sales ratios," International Journal of Production Economics, Elsevier, vol. 93(1), pages 13-23, January.
  7. Alan S. Blinder & Louis J. Maccini, 1990. "The Resurgence of Inventory Research: What Have We Learned?," NBER Working Papers 3408, National Bureau of Economic Research, Inc.
  8. Marco Malgarini, 2007. "Inventories and business cycle volatility: an analysis based on ISAE survey data," ISAE Working Papers 84, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  9. Dimelis, Sophia P., 2001. "Inventory investment over the business cycle in the EU and the US," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 1-8, May.
  10. Dimelis, Sophia P. & Lyriotaki, Maria-Niki, 2007. "Inventory investment and foreign ownership in Greek manufacturing firms," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 8-14, July.
  11. Hirsch, Albert A., 1996. "Has inventory management in the US become more efficient and flexible? A macroeconomic perspective," International Journal of Production Economics, Elsevier, vol. 45(1-3), pages 37-46, August.
  12. Irvine, F. Owen & Schuh, Scott, 2005. "Inventory investment and output volatility," International Journal of Production Economics, Elsevier, vol. 93(1), pages 75-86, January.
  13. Stern, Andrew, 2001. "Multiple regimes in the US inventory time-series: A disaggregate analysis," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 45-53, May.
  14. Irvine, F. Owen, 2003. "Problems with using traditional aggregate inventory to sales ratios," International Journal of Production Economics, Elsevier, vol. 81(1), pages 41-50, January.
  15. Guariglia, Alessandra & Mateut, Simona, 2010. "Inventory investment, global engagement, and financial constraints in the UK: Evidence from micro data," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 239-250, March.
  16. Humphreys, Brad R., 2001. "The behavior of manufacturers inventories: Evidence from US industry level data," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 9-20, May.
  17. Chikan, Attila & Tatrai, Tunde, 2003. "Developments in global inventory investment," International Journal of Production Economics, Elsevier, vol. 81(1), pages 13-26, January.
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Cited by:
  1. Obermaier, Robert, 2012. "German inventory to sales ratios 1971–2005—An empirical analysis of business practice," International Journal of Production Economics, Elsevier, vol. 135(2), pages 964-976.

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