This paper analyses inventory investment using a balanced panel of 82 Dutch firms. We start from the Lovell (1961) inventory model and amend it with cash flow to introduce capital market imperfections. The empirical evidence provides support for the relevance of capital market imperfections in explaining Dutch inventory investment. The results suggest that cash flow is a relevant variable omitted from the original Lovell model. The study provides a better understanding of inventory behaviour in general. Copyright 2002 by Taylor and Francis Group
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Article provided by Taylor and Francis Journals in its journal Applied Economics.
Volume (Year): 34 (2002) Issue (Month): 1 (January) Pages: 15-22 Download reference. The following formats are available: HTML
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