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

Posted: 11 Oct 2004

See all articles by Fabio C. Bagliano

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

Alessandro Sembenelli

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

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 (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.

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

JEL Classification: C23, E22

Suggested Citation

Bagliano, Fabio C. and Sembenelli, Alessandro, The Cyclical Behaviour of Inventories: European Cross-Country Evidence from the Early 1990s Recession. Available at SSRN: https://ssrn.com/abstract=601031

Fabio C. Bagliano (Contact Author)

University of Turin - Department of Economics and Statistics ( email )

C. so Unione Sovietica, 218 Bis
Torino, I-10134
Italy
+39 011 670 6084 (Phone)
+39 011 670 6062 (Fax)

HOME PAGE: http://web.econ.unito.it/bagliano

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

University of Turin - Collegio Carlo Alberto ( email )

via Real Collegio 30
Moncalieri, Torino 10024
Italy

Alessandro Sembenelli

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

C. so Unione Sovietica, 218 Bis
Torino, 13820-4020
Italy
+39 011 670 6059 (Phone)
+39 011 670 6062 (Fax)

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