The survey and analysis of financial patterns within manufacturing industries have long been an important part of the IUI research program. In this study the importance of financial factors in short-run investment spending decisions has been emphasized. Particular stress has been laid on the influence on such decisions of variations in the availability of external funds in the organized credit market and the extent of inter-firm borrowing in the so called "grey" market.
The impact of financial factors on investment planning has been formalized in terms of a realization function which is tested econometrically on annual time-series data for the period 1950-63. Predictive performance of the model is later checked against data for the period 1964 through 1967. Furthermore the financial planning section of the total model more has been used to forecast industrial demands on the organized credit market for the period 1965-70. This forecast has been based on the investment and production plans of the Government Long-term Survey of 1966. The study concludes with an evaluation and a discussion of the potentialities of various monetary policy measures based on the empirical results presented.
This study, a more extensive version of which was published in 1967 in Swedish, is to be viewed as an intermediate report of a more extensive project on factors behind investment and growth in manufacturing industries which is on the research program of the institute. This publication, finally, is he slightly rephrased version of apaper presented to the European Meeting on Statistics, Econometrics and Management Science in Amsterdam in September 1968.
