The link investment-finance: an empirical analysis on the Italian mechanic sector
This paper analyzes the investments of the Italian mechanical firms with a model with simultaneous investments and financial structure. In our empirical specification the neoclassical and the new-keynesian «excess sensitivity» models are empirically contrasted as two sub-cases of a more general framework. The choice of the relevant variables is implemented with a battery of preliminary Granger causality tests; the lag structure of the model is defined with the help of the «General-to-specific» approach. Our empirical results are, surprisingly, consistent with the neoclassical theory rather than the new-Keynesian «excess sensitivity» model. This result contrasts with an extended empirical literature, normally based on the data of corporations, listed in the stock markets. Therefore the behaviour of medium and small sized firms, largely depending on bank credit seems to be more regular and consistent with the conventional neoclassical modelling features. This result does not necessarily rule out the relevance of financial market imperfections and it might be due to other factors such the role of bank-customer relations in reducing information asymmetries in the bank credit market.
If you experience problems downloading a file, check if you have the proper application to view it first. 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:mul:je8794:doi:10.1429/31936:y:2010:i:1:p:93-122. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.