Ownership Structure and Inventory Policy
Tribó, J. (2007) “Ownership structure and inventory policy". International Journal of Production Economics 108 (1-2); pp. 213-220.
9 Pages Posted: 28 Aug 2014
Date Written: August 27, 2014
Abstract
This paper makes use of a database of Spanish manufacturing firms to explore the effect of a firm’s ownership structure on its inventory policy. We have argued that the presence of institutional investors reduces a firm’s liquidity needs and prevents overinvestment policies. This, in turn, leads to lower equilibrium inventory levels. Also, we expect, on average, less inventory investment when bank-equity financing is compared with bank-debt financing. Finally, other components of ownership structure like the number of blockholders prevent inventory overinvestment. This may have an impact on the economic cycle as more firms are floated on the stock market hence changing their ownership structure.
Keywords: Ownership Structure, Inventory Policy
JEL Classification: E22
Suggested Citation: Suggested Citation