The Micro Impact of Macroprudential Policies: Firm-Level Evidence

By Meghana Ayyagari, Thorsten Beck, Maria Soledad Martinez Peria

December 7, 2018

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Meghana Ayyagari, Thorsten Beck, and Maria Soledad Martinez Peria. The Micro Impact of Macroprudential Policies: Firm-Level Evidence, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Combining balance sheet data on 900,000 firms from 48 countries with information on the adoption of macroprudential policies during 2003-2011, we find that these policies are associated with lower credit growth. These effects are especially significant for micro, small and medium enterprises (MSMEs) and young firms that, according to the literature, are more financially constrained and bank dependent. Among MSMEs and young firms, those with weaker balance sheets exhibit lower credit growth in conjunction with the adoption of macroprudential policies, suggesting that these policies can enhance financial stability. Finally, our results show that macroprudential policies have real effects, as they are associated with lower investment and sales growth.

Subject: Central bank policy rate, Economic sectors, Financial crises, Financial sector policy and analysis, Financial services, Global financial crisis of 2008-2009, Macroprudential policy, Macroprudential policy instruments, Small and medium enterprises

Keywords: Balance sheet data, Central bank policy rate, Financial development, Financing constraint, Financing growth, Firm assets, Firm characteristic, Firm financing, Global, Global financial crisis of 2008-2009, Macroprudential policies, Macroprudential policy, Macroprudential policy instruments, Micro firm, Return on assets, Small and medium enterprises, WP

Publication Details

Pages:

65
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/267
Stock No:

WPIEA2018267
ISBN:

9781484385654
ISSN:

1018-5941

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