This paper investigates the behaviour of inventory investment in Poland both at the macro and the micro level over the business cycle and tries to find determinants of inventory investment of Polish firms. The analysis presented in this paper is based on quarterly panel data (F01 CSO) and survey data accumulated by the NBP. This paper finds that inventory investment is a procyclical component of output over the business cycle in Poland. Furthermore, based on panel data analysis, this paper finds positive correlations between inventory investment and sales for all types of inventories (accelerator effect) and that inventory behaviour is affected by expectation of holding gains. Additionally, panel data analysis shows that cash flows constitute an important determinant of inventory behaviour and finds finance constraints in small firms in Poland.

Keywords: cycles, inventory investment, firm behaviour, finance constraints, model with panel data.

  Małgorzata Pawłowska, Piotr Popowski, Agnieszka Sawicka, Izabela Tymoczko, Determinants of Inventory Investment in the Polish Non-Financial Sector - Empirical Evidence - plik pdf; (413 KB)