Ownership structure and inventory policy
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.
|Date of creation:||Aug 2004|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.business.uc3m.es/es/index|
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.:
- Diamond, Douglas W, 1991. "Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 689-721, August.
- Krautter, Jochen, 1999. "Inventory theory: New perspectives for corporate management," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 129-134, March.
- Pirttila, Timo & Virolainen, Veli-Matti, 1992. "An overview of the state and problems of inventory management in Finland," International Journal of Production Economics, Elsevier, vol. 26(1-3), pages 217-220, February.
- Ferris, Stephen P. & Kumar, Raman & Sant, Rajiv & Sopariwala, Parvez R., 1998. "An agency analysis of the effect of long-term performance plans on managerial decision making," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(1), pages 73-91.
- Wahal, Sunil & McConnell, John J., 2000. "Do institutional investors exacerbate managerial myopia?," Journal of Corporate Finance, Elsevier, vol. 6(3), pages 307-329, September.
- 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.
- Anil K. Kashyap & Owen A. Lamont & Jeremy C. Stein, 1993. "Credit conditions and the cyclical behavior of inventories," Working Paper Series, Macroeconomic Issues 93-7, Federal Reserve Bank of Chicago.
- Tribo, Josep A., 2001. "Inventories, financial structure and market structure," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 79-89, May.
- Alfaro, Jose A. & Tribo, Josep A., 2003. "Operations manager turnover and inventory fluctuations," International Journal of Production Economics, Elsevier, vol. 81(1), pages 51-58, January.
- Robert E. Carpenter & Steven M. Fazzari & Bruce C. Petersen, 1998. "Financing Constraints And Inventory Investment: A Comparative Study With High-Frequency Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 513-519, November.
- Armo Gomes & Walter Novaes, 2001. "Sharing of Control as a Corporate Governance Mechanism," Penn CARESS Working Papers 3756d78204ca49d92aaf1c17c, Penn Economics Department.
- Charles W. Calomiris & Charles P. Himmelberg & Paul Wachtel, 1994.
"Commercial Paper, Corporate Finance and the Business Cycle: A Microeconomic Perspective,"
94-17, New York University, Leonard N. Stern School of Business, Department of Economics.
- Calomiris, Charles W. & Himmelberg, Charles P. & Wachtel, Paul, 1995. "Commercial paper, corporate finance, and the business cycle: a microeconomic perspective," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 203-250, June.
- Charles W. Calomiris & Charles P. Himmelberg & Paul Wachtel, 1994. "Commercial Paper, Corporate Finance, and the Business Cycle: A Microeconomic Perspective," NBER Working Papers 4848, National Bureau of Economic Research, Inc.
- Hendel, Igal, 1996. "Competition under Financial Distress," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 309-24, September.
- Blazenko, George W. & Vandezande, Kirk, 2003. "Corporate holding of finished goods inventories," Journal of Economics and Business, Elsevier, vol. 55(3), pages 255-266.
When requesting a correction, please mention this item's handle: RePEc:cte:wbrepe:wb043211. 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: (Ana Poveda)
If references are entirely missing, you can add them using this form.