This paper explores the effect of a firm’s ownership structure on its inventory policy. We have argued that the presence of institutional investors like banks as blockholders, reduces a firm’s liquidity needs and prevents overinvestment policies. This, in turn, leads to lower inventory levels, especially for small and/or diversified firms. Also, we expect less inventory investment when bank equity financing is compared with bank debt financing. Finally, other components of ownership structure like the number of blockholders prevent overinvestment that may generate excessive inventory accumulation. We have proved these theoretical contentions making use of a database of Spanish manufacturing firms.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Universidad Carlos III, Departamento de Economía de la Empresa in its series Business Economics Working Papers with number
wb043211.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: