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Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/6049

Title: Financial frictions and the K/L ratio in UK manufacturing industries
Authors: Spaliara, Marina-Eliza
Keywords: Financial frictions
Capital-labour ratio
Manufacturing industries
Issue Date: 2010
Publisher: © Loughborough University
Series/Report no.: Loughborough University. Department of Economics. Discussion Paper Series;WP 2010 - 07
Abstract: Using comprehensive financial data on UK unquoted firms, we investigate whether technological differences of UK manufacturing industries influence the response of firms' capital-labour ratio (K/L) to changes in financial indicators under capital market imperfections. The results reveal that cash flow has a positive impact on the K/L ratio for constrained firms in high tech industries and a negative impact for firms with similar characteristics in low tech industries. Specifically, the sensitivity of the K/L ratio to cash flow not only depends on firms' net worth and financial frictions, but most importantly on firms' industry affiliation.
Description: This working paper is also available at: http://ideas.repec.org/p/lbo/lbowps/2010-07.html
Version: Published
URI: https://dspace.lboro.ac.uk/2134/6049
ISSN: 1750-4171
Appears in Collections:Working Papers (Economics)

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