Attitudes towards immigration in Europe

This paper examines attitudes towards immigration across a range of countries in Europe. In line with the current literature we find evidence that both economic and non-economic factors shape attitudes towards the arrival of immigrants. However, we also show that the relative importance of these factors depends crucially on the race of the arriving immigrants. We find that economic considerations are more likely to shape attitudes towards the arrival of same race immigrants, while immigrants of a different race are perceived to have a negative impact on the country´s culture. Moreover, educated natives perceive labour market competition from arriving immigrants of the same race only

Inventories and sales uncertainty

We investigate the empirical linkages between sales uncertainty and firms´ inventory investment behavior while controlling for firms´ financial strength. Using large panels of manufacturing firms from several European countries we find that higher sales uncertainty leads to larger stocks of inventories. We also identify an indirect effect of sales uncertainty on inventory accumulation through the financial strength of firms. Our results provide evidence that financial strength mitigates the adverse effects of uncertainty

The Inventory Channel of Trade Credit: Theory and Evidence

We develop a simple theoretical model with a stochastic demand framework that captures the trade-off between inventories and trade credit. The essence is that the firm is in the middle of a credit chain, and produces goods for sale, holding inventories of goods that were produced but unsold at a cost. In the face of uncertain demand for its products the firm extends trade credit to its financially constrained customers to obtain additional sales. Our model provides directly testable predictions to identify the response of accounts payable and accounts receivable to changes in the cost of inventories, profitability, risk and liquidity, and importantly, this influence operates through a production channel. Our results support the model and complement many existing studies focused on explaining the financial terms of trade credit

Inventories and sales uncertainty

We investigate the empirical linkages between sales uncertainty and firms´ inventory investment behavior while controlling for firms´ financial strength. Using large panels of manufacturing firms from several European countries we find that higher sales uncertainty leads to larger stocks of inventories. We also identify an indirect effect of sales uncertainty on inventory accumulation through the financial strength of firms. Our results provide evidence that financial strength mitigates the adverse effects of uncertainty

Payment Choice in International Trade: Theory and Evidence from Cross-Country Firm Level Data

When trading, firms choose between different payment contracts. As shown theoretically in Schmidt-Eisenlohr (forthcoming), this allows firms in international trade to optimally trade-off differences in financing costs and enforcement across countries. This paper provides evidence from a large number of countries that shows that country characteristics are indeed central determinants of the payment contract choice. As predicted, the use of open account decreases in financing costs and contract enforcement in the source country. We extend the theory and test two additional predictions. First, we show that the more complex the industry of a firm, the more important is the quality of contract enforcement and the less important are the financing costs for the contract choice. Second, we compare direct and indirect exporters and find evidence that suggests that intermediaries play a relevant role in contract enforcement across borders

The Inventory Channel of Trade Credit: Theory and Evidence

ABSTRACT We develop a simple theoretical model with a stochastic demand framework that captures the trade-off between inventories and trade credit. The essence is that the firm is in the middle of a credit chain, and produces goods for sale, holding inventories of goods that were produced but unsold at a cost. In the face of uncertain demand for its products the firm extends trade credit to its financially constrained customers to obtain additional sales. Our model provides directly testable predictions to identify the response of accounts payable and accounts receivable to changes in the cost of inventories, profitability, risk and liquidity, and importantly, this influence operates through a production channel. Our results support the model and complement many existing studies focused on explaining the financial terms of trade credit. JEL classification: G31, G3