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Multiple Market Imperfections, Firm Profitability and Investment

Author Info

Listed author(s):
  • Giorgio Calcagnini

    ()

    (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")

  • Annalisa Ferrando

    ()

    (European Central Bank Frankfurt)

  • Germana Giombini

    ()

    (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")

Abstract

This paper investigates the impact of the interaction between product, labor and financial market imperfections on firms’ investment by using a panel data of European firms over the period 1994-2008. It studies the impact of product and labor market regulations on firm investment and how it changes with the degree of financial market imperfections. Findings show that product and labor market regulations negatively affect firm investment by lowering firm profitability. The presence of more efficient financial markets increases firm investment and lowers the negative effects of market regulations.

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File URL: http://www.econ.uniurb.it/RePEc/urb/wpaper/WP_13_05.pdf
File Function: First version, 2013
Download Restriction: no

Paper provided by University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini in its series Working Papers with number 1305.

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Length: 33 pages
Date of creation: 2013
Date of revision: 2013
Handle: RePEc:urb:wpaper:13_05
Contact details of provider: Web page: http://www.econ.uniurb.it/

More information through EDIRC

Keywords: Investment; Regulation Impact; EPL; Financial Market Development.;

Other versions of this item:

Find related papers by JEL classification:
  • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
  • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
  • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
  • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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Cited by:

  1. Kose,Ayhan & Ohnsorge,Franziska Lieselotte & Ye,Lei Sandy & Islamaj,Ergys, 2017. "Weakness in investment growth : causes, implications and policy responses," Policy Research Working Paper Series 7990, The World Bank.
  2. Giorgio Calcagnini & Germana Giombini & Giuseppe Travaglini, 2015. "The productivity gap among European countries," Working Papers 1510, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2015.
  3. Germana Giombini & Francesco Perugini & Giuseppe Travaglini, 2016. "The productivity slowdown puzzle of European countries: a focus on Italy," Working Papers 1606, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2016.

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