Skip to main content
Article thumbnail
Location of Repository

How does financial pressure affect firms?

By Stephen Nickell and Daphne Nicolitsas


How does monetary policy work? While one aspect of the investigation has focused on the behaviour of consumers, another has concentrated on the behaviour of companies faced with the kind of financial pressures associated with tight monetary policy. The general focus in this area is on the impact of financial constraints on investment expenditures including fixed capital and inventories. Our purpose is to shift this focus somewhat and to concentrate on the impact of financial pressure on other aspects of company behaviour. We first discuss briefly the theoretical background and the empirical formulation. Then, using panel data on a large number of UK companies, we derive a number of results

Topics: HD Industries. Land use. Labor
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Year: 1995
OAI identifier:
Provided by: LSE Research Online

Suggested articles


  1. (1986). A Super Game Theoretic Model of Price Wars during Booms", doi
  2. (1993). Competition and Corporate Performance", Centre for Economic Performance,
  3. (1991). Corporate Structure, Liquidity and Investment: Evidence from Japanese Industrial Groups", doi
  4. (1994). Dynamic Investment Models and the Firm's Fin anc ial Pol icy ", Re vie w of Eco no mic Stu die s ,
  5. (1991). Employment Determination in British Industry: Investigations Using Micro-Data", doi
  6. (1994). Financial Market Imperfections, Firm Leverage, and the C y clic alit y of Em plo ym ent ", A
  7. (1988). Financing Constraints and Corporate Investment", doi
  8. (1988). Imperfect Information, Finance Constraints, and Business Fluctuations", doi
  9. (1964). Investment Decisions, Economic Forecasting and Public Policy (Boston: doi
  10. (1990). Investment, Financial Factors and Cash Flow: Evidence from UK Panel Data", doi
  11. (1994). Monetary Policy, Business Cycles, and the Behaviour of Small Manufacturing Firms", doi
  12. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations", doi
  13. (1987). The Cyclical Behaviour of Marginal Cost and Price",
  14. (1987). The Effects of Inflation and Real Wages on Employment", doi
  15. (1981). The Estimation of Dynamic Models with Error Components", doi
  16. (1993). The Role of Credit Market Imperfections in the Monetary Transmission Mechanism: Arguments and Evidence", doi
  17. (1986). The UK Capital Stock - New Estimates of Pre ma tur e Scr ap pin g",
  18. (1991). Unemployment, Macroeconomic Performance and the Labour Market (Oxford: doi
  19. (1994). Wages, Effort and Productivity", doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.