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The cyclical behaviour of inventories: European cross-country evidence from the early 1990s recession

Listed author(s):
  • Fabio Bagliano
  • Alessandro Sembenelli

This paper employs data for a panel of firms from France, Italy and the UK to study the effect of the recession of the early 1990s on inventory investment, controlling for cyclical fluctuations at the firm level. The results clearly show some common patterns across countries, pointing to the relevance of financial factors (namely, the level of leverage) in propagating initial recessionary shocks. Moreover, Italian firms, especially if 'small and young', seem more likely to suffer from a reduction in the value of collateralizable assets possibly originated by restrictive policy actions.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684042000295601
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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 36 (2004)
Issue (Month): 18 ()
Pages: 2031-2044

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Handle: RePEc:taf:applec:v:36:y:2004:i:18:p:2031-2044
DOI: 10.1080/0003684042000295601
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  6. Bernanke, Ben S & Blinder, Alan S, 1992. "The Federal Funds Rate and the Channels of Monetary Transmission," American Economic Review, American Economic Association, vol. 82(4), pages 901-921, September.
  7. Stephen D. Oliner & Glenn D. Rudebusch, 1996. "Is there a broad credit channel for monetary policy?," Economic Review, Federal Reserve Bank of San Francisco, pages 3-13.
  8. Anil K Kashyap & Owen A. Lamont & Jeremy C. Stein, 1994. "Credit Conditions and the Cyclical Behavior of Inventories," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 565-592.
  9. Stephen Bond & Julie Elston & Jacques Mairesse & Benoit Mulkay, 1997. "Financial factors and investment in Belgium, France, German and the UK: A comparison using company panel data," IFS Working Papers W97/08, Institute for Fiscal Studies.
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  15. Gerald A. Carlino & Robert H. DeFina, 1998. "Monetary policy and the U.S. and regions: some implications for European Monetary Union," Working Papers 98-17, Federal Reserve Bank of Philadelphia.
  16. Steven M. Fazzari & R. Glenn Hubbard & BRUCE C. PETERSEN, 1988. "Financing Constraints and Corporate Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
  17. Simon Gilchrist & Egon Zakrajsek, 1995. "The importance of credit for macroeconomic activity: identification through heterogeneity," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 39, pages 129-173.
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  19. Laura Rondi & Brian Sack & Fabio Schiantarelli & Alessandro Sembenelli, 1998. "Firms' Financial and Real Responses to Monetary Tightening: Evidence for Large and Small Italian Companies," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 57(1), pages 35-64, April.
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