Fabio-Cesare 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 '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.
Updated on: 03/19/2019 16:51