The Cyclical Behavior of Inventories: European Cross-Country Evidence from the Early 1990s Recession

Sembenelli, Alessandro; Bagliano, Fabio C.

doi:10.2139/ssrn.276848

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The Cyclical Behavior of Inventories: European Cross-Country Evidence from the Early 1990s Recession

Universita di Torino Working Paper No. 01-53

30 Pages Posted: 17 Jul 2001

See all articles by Alessandro Sembenelli

Alessandro Sembenelli

University of Turin - Department of Economics and Financial Sciences G. Prato

Fabio C. Bagliano

University of Turin - Department of Economics and Statistics; Center for Research on Pensions and Welfare Policies (CeRP); University of Turin - Collegio Carlo Alberto

Date Written: June 2001

Abstract

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 '90s 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 in propagating initial recessionary shocks. However, 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.

Keywords: inventory investment, financial accelerator, recessions, panel data

JEL Classification: C23, E22

Suggested Citation: Suggested Citation

Sembenelli, Alessandro and Bagliano, Fabio C., The Cyclical Behavior of Inventories: European Cross-Country Evidence from the Early 1990s Recession (June 2001). Universita di Torino Working Paper No. 01-53, Available at SSRN: https://ssrn.com/abstract=276848 or http://dx.doi.org/10.2139/ssrn.276848