TY - JOUR
T1 - Financing constraints and inventory investment
T2 - A comparative study with high-frequency panel data
AU - Carpenter, Robert E.
AU - Fazzari, Steven M.
AU - Petersen, Bruce C.
PY - 1998/11
Y1 - 1998/11
N2 - This study provides new evidence of the importance of financing constraints for explaining the dramatic cycles in inventory investment. We compare the empirical performance of different financial variables (coverage ratio, cash stocks, and cash flow) used in previous research to test for the presence of financing constraints. The comparison is undertaken in a common framework with an identical sample and high-frequency (quarterly) firm panel data. Cash flow is much more successful than cash stocks or coverage in explaining the facts about inventory investment across firm size, different inventory cycles, and different manufacturing sectors.
AB - This study provides new evidence of the importance of financing constraints for explaining the dramatic cycles in inventory investment. We compare the empirical performance of different financial variables (coverage ratio, cash stocks, and cash flow) used in previous research to test for the presence of financing constraints. The comparison is undertaken in a common framework with an identical sample and high-frequency (quarterly) firm panel data. Cash flow is much more successful than cash stocks or coverage in explaining the facts about inventory investment across firm size, different inventory cycles, and different manufacturing sectors.
UR - http://www.scopus.com/inward/record.url?scp=0032272112&partnerID=8YFLogxK
U2 - 10.1162/003465398557799
DO - 10.1162/003465398557799
M3 - Article
AN - SCOPUS:0032272112
SN - 0034-6535
VL - 80
SP - 513
EP - 519
JO - Review of Economics and Statistics
JF - Review of Economics and Statistics
IS - 4
ER -