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FIRM BEHAVIOUR AND FINANCIAL PRESSURE: EVIDENCE FROM SPANISH PANEL DATA
Author(s) -
Benito Andrew,
Hernando Ignacio
Publication year - 2007
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.0307-3378.2007.00266.x
Subject(s) - panel data , dividend , investment (military) , economics , work (physics) , finance , monetary economics , business , econometrics , mechanical engineering , politics , political science , law , engineering
This paper examines responses by firms in Spain to the experience of financial pressure. Using panel data methods applied to a large company panel, a number of aspects of corporate behaviour and the response of each to financial pressure are examined. We consider fixed investment, inventories, employment – distinguishing both permanent and temporary contract employees – and dividend policies. Our results include finding significant effects of financial pressure from borrowing costs on each outcome, particularly investment and employment. The effects on temporary employment are also found to be larger and work through more quickly than on permanent employment.