سرمایه گذاری موجودی و محدودیت های مالی در صنعت ساخت ایتالیا: یک روش GMM اطلاعات پانل

Three large unbalanced panels of Italian manufacturing firms observed over the period 1991–2009 are employed to assess, by means of a dynamic GMM approach, whether the existence of financial frictions is suitable to explain deviations of inventories from their long-run path. A negative response of inventory investment to the presence of financial burdens might provide evidence of a significant role played by the financial framework in conditioning the real side of the economy, especially during recession years, when liquidity problems arise. The negative effect is found over the entire analyzed period, with firms' dimensional aspects accounting more than risk characteristics to explain the phenomenon, but the inclusion of recessionary dummies into the model leads to controversial and puzzling results. A significant recessionary effect is found during the Nineties, accounting for inventories being more sensitive to financial frictions during the main recessionary peaks, 1993 and 1996. The result is not confirmed by the most recent estimates, especially the ones referring to the 2008–2009 recessionary shock, whose effects are investigated for the first time by a paper addressing the inventory investment–financial constraints subject. Alternative hypothesis for the proposed results have been tested on data. Firms were found to rely on inventory decumulation to a lesser extent compared to the past, to generate internal financing. More specifically, disinvestments in financial assets were found to represent, as a matter of fact, one of the main drivers adopted to ease liquidity tensions: a negative and strongly significant relationship with inventory investment was detected, after controlling for short-run liquidity constraints at firm level. By contrast, only a weak negative relationship was established with fixed capital during the same recessionary biennium.

Inventory movements proved to be strongly related to output fluctuations during the past. It is widely accepted that they are useful indicators of business activities, in the sense of being precursors, at certain stages, of output downward corrections at macro level. A flourishing literature has documented that firm inventories tend to be proportional to sales in the long-run but the relation is violated in the short-run, when a sort of trade-off between inventory investment and sales takes place. Financial constraints faced by firms are found to be one of the main determinants of downward corrections in inventories. The negative response of inventory investment to the presence of financial boundaries might provide evidence of a significant role played by the financial framework in conditioning the real side of the economy, especially during recession years, when liquidity problems arise. The present paper addresses this issue by exploiting three large unbalanced panels of Italian manufacturing firms observed over the period 1991–2009. The selected period includes two severe recessionary episodes for the Italian economy: the early Nineties recession and the 2008–2009 shock. This is, as far as I know, the first paper on the subject analyzing the effects of the latter recession over the Italian manufacturing sector. A dynamic approach is adopted to shed light on peculiarities of the phenomenon that may rely on intrinsic riskiness of firms, to the role played by sectorial effects or to different reactions to monetary policy stances during the past years, especially as far as the liquidity accumulation attitude is concerned. The remainder of this paper is organized as follows. The next section presents and briefly discusses the theoretical background on inventory behavior. Section 3 describes the empirical specification of the model, both the baseline specification and the related variants. Section 4 is devoted to data description while empirical econometric results and further tests are discussed in Section 5. The main conclusions are summarized in Section 6.

We have exploited three large unbalanced panel datasets of Italian manufacturing firms observed over the period 1991–2009 to assess whether the existence of financial constraints is suitable to explain short-run deviations of inventory investment from its long-run path. In line with previous studies on the subject, empirical results suggest that financial constraints affect negatively the inventory investment behavior, once controlling for sales, for the influence of a long-run target inventory level (which gives the model an error-correction format) and for other control variables (i.e. time dummies). The results are robust to the adoption of different definitions of the variable that proxies for financial burdens at firm level (leverage, short-term leverage and debt maturity). We discarded ‘a priori’ the inclusion of proxies for the strength of financial constraints based on the cash flow variables, due to collinearity effects with the sales variables in our error-correction model, as well as of proxies which make use of liquidity measures, being more suitable to identify short-run tensions at firm level. Moreover, in order to explore in detail whether the sensitivity of inventory investment to financial constraints may differ among groups of firms displaying different risk characteristics, we allowed the coefficient associated to our financial proxy to vary across firms segmented by risk separation criteria. Dimensional dummies are suitable to identify firms that are more likely to face financial constraints in a traditional sense. Inventory investment was found to be more sensitive to financial frictions in correspondence to small firms in the sample. Moreover, firms were assigned a risk dummy on the basis of three additional separation criteria: the first two variables come from the balance sheets (the coverage ratio and the acid test ratio) and the third one is a multivariate proxy for risk (CEBI—Centrale dei Bilanci ratings). Estimates provide evidence that, as a general practice, the negative elasticity of inventory investment to financial burdens is higher for riskier firms, despite the reduced discriminating power of the coverage ratio in isolating financially constrained firms in the last panel dataset. The widespread difficulties faced by firms during the 2008–2009 recessionary shock might provide an explanation for the result. A dimensional aspect of the inventory investment–financial constraints linkage was preserved also in case additional variability was introduced in the financial proxy, i.e., by interacting dimensional dummies and risk dummies. Bigger firms were assigned a lower (or at least equal) coefficient with respect to small risk-free firms in the sample. Dimensional effects were also employed to explain the results obtained from testing the inventory investment model over subsets of firms segmented by Pavitt clusters of industrial activities and by industrial districts. A more pronounced sensitivity of inventory investment to financial frictions was found for firms belonging to traditional sectors of activity – that typically rely on the industrial districts agglomeration economies in the Italian manufacturing framework – whose production base composition is more likely to be affected by the presence of small firms. To explore more in detail how the link between inventory investment and financial constraints behaved during recessionary periods, the introduction of recessionary dummies was considered. The inclusion of such dummies was suitable to detect a greater sensitivity of inventory investment to financial frictions during the early Nineties recession (additional recessionary effects during the 1993 and the 1996 peaks). To the extent that the early Nineties recession was triggered by monetary policy tightening, these findings may support the ‘financial accelerator’ argument of an active role played by financial frictions in amplifying recessionary effects over the real side of the economy. By contrast, the phenomenon was found to be almost absent during the most recent recessionary episodes (the 2002–2003 biennium and the 2008–2009 phase): recessionary dummies failed in capturing additional inventory investment variability, despite being inventory investment still suitable to show a negative linkage with financial frictions over the entire analyzed period (1998–2009). The results were preserved also in the case of exploitation of dimensional dummies and of dummies representing intrinsic riskiness of firms. It should be noted how the less pervasive feature of the 2002–2003 economic slowdown might have reflected in less pronounced liquidity tensions at firm level, especially because of the fast recovery that followed in terms of industrial production. By contrast, the deep crisis that occurred in the 2008–2009 biennium was marked by peculiarities that might prepare the ground for different interpretations for the proposed results. Despite the several interventions that took place in the credit market in order to ease liquidity tensions, a hypothesis of financial constraints whose strength remained unaltered during such a severe recessionary shock is quite hard to be trusted. In light of the above, we tested the alternative hypothesis that firms relied on inventory decumulation to a lesser extent with respect to the past, because of the adoption of buffer strategies involving other types of firm capital. In particular, we tested a modified version of the error-correction model employed so far in the paper, with a liquidity proxy in place of the variable proxying for financial constraints. Liquidity proxies are suitable to shed light on the existence of short-run liquidity tensions at firm level. Moreover, the model was augmented for variables capturing the (expected negative) relationship between our dependent variable, inventory investment, and both financial assets and fixed capital. As a result of the performed regressions, disinvestments in financial assets were found to represent one of the main drivers for liquidity accumulation during the 2008–2009 recessionary shock. By contrast, only a weak negative relationship was detected between fixed capital and inventory investment. The challenging exit strategies that are going to influence the Italian economic framework during the next coming years might create room for additional research in this field. The 2012 new slowdown of the Italian economy comes after a period characterized by severe reduction in the value of collateralizable assets at firm level, as well as of increased liabilities. It could therefore turn out to be suitable to shed light on differences in terms of inventory investment behavior with respect to the latest analyzed shock.