This paper examines how firms interact with their rivals. The main novelty of our approach is that we let conjectural variations depend on the actual ability of other firms to react, which we measure by both the physical capacity and financial status of firms. Our main findings are threefold....

In this paper we analyse to what extent the outward shift in the Portuguese Beveridge curve since 2007 has been due to structural or cyclical factors and how likely the outward shift will persist. We do this by empirically estimating the Beveridge curve in a Markov-switching panel setting with...

This paper addresses the issue of threshold effects between public debt and economic growth in the Caribbean. The main finding is that there exists a threshold debt to gross domestic product (GDP) ratio of 55–56 percent. Moreover, the debt dynamics begin changing well before this threshold is...

This paper analyses the determinants of the inventory to assets ratio in panel data sets of Japanese and UK firms in the period 1960–85. The analytical framework sets inventory decisions in the context of decisions by the firm about other assets and liabilities, in contrast to traditional...

This paper investigates monetary policy transmission at the microeconometric level. The credit rationing literature suggests that monetary policy has a larger effects on firms which are credit constrained. I use a large panel of German industrial firms to investigate whether this is empirically...

Theories of capital market imperfections point out the role of financial factors in determining investment behaviour of firms. However, no attempt has been made so far to provide a framework that can directly verify the link between capital market imperfections and firm level investment...

This paper tests the power of real options theory to explain investment under uncertainty, exploiting differences in the degree of irreversibility between machinery and buildings. It reports estimates of investment equations for each asset class using a large sample of UK manufacturing...

While common sense would indicate that trade and growth are positively correlated, it is not clear, both from theoretical and empirical perspectives, whether or not trade is a proximate determinant of economic growth. We try to elucidate the ambiguities in the literature, by studying the nexus...

The theoretical literature suggests that there should be a bi-directional relationship between investment and mergers. This essay uses homogenous and heterogeneous panel Granger causality tests to examine this hypothesis. The paper finds that in high-income countries, cross-border mergers tend...