Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153377
Authors: 
Martinez-Carrascal, Carmen
Ferrando, Annalisa
Year of Publication: 
2008
Series/Report no.: 
ECB Working Paper 943
Abstract: 
This paper analyses the impact that firms financial position has on investment decisions using panel data from a large sample of non-financial corporations(around 120,000 firms) in six euro area countries(Belgium, Germany, France, Italy, the Netherlands and Spain). The results indicate that financial position is important to explain capital expenditures, as financial pressure appears relevant in explaining investment dynamics when it is proxied by cash flow, indebtedness and debt burden. The results also show diĀ¤erences in the sensitivity of investment rates to changes in financial pressure across countries, which appears to be especially large in the Netherlands and Italy and relatively small in Germany.
Subjects: 
balance sheet channel
Financial pressure
fixed investment
panel data
JEL: 
C33
E22
G32
J23
Document Type: 
Working Paper

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