Inventories, financial structure and market structure

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Abstract

In this paper, we study the effect of different financial contracts on the firm's inventory policy. Doing so will allow to define the best financial instruments to diminish the stock variability of a profit-maximizing firm in a given economic environment (expansion or recession), and for a given market structure. We show that in periods of recession (expansion), reducing (increasing) the amount of short-term debt is an optimal strategy independently of the market structure.

Original languageEnglish
Pages (from-to)79-89
Number of pages11
JournalInternational Journal of Production Economics
Volume71
Issue number1-3
DOIs
StatePublished - 6 May 2001

Keywords

  • Financial structure
  • Inventories
  • Market structure

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