Firm-Level Data and Monetary Policy: The Case of a Middle Income Country
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Summary:
We test the existence of the balance sheet channel of monetary policy in a middle-income country. Firm-level data scarcity and quality, in such a context, make the identification of this channel a steep challenge. To circumvent this challenge, we use panel instrumental variables estimation with measurement error to analyze the financial statements of 58 500 Moroccan firms over the period 2010-2016. Our analysis confirms the existence of this channel. It shows that monetary policy has a significant impact on small and medium enterprises’ access to banks’ financing, and that firm-specific variables are key determinants of firms’ financing decisions.
Series:
Working Paper No. 2019/239
Subject:
Banking Collateral Econometric analysis Estimation techniques External debt Financial institutions Financial statements Loans Public financial management (PFM) Trade credits
English
Publication Date:
November 1, 2019
ISBN/ISSN:
9781513518862/1018-5941
Stock No:
WPIEA2019239
Pages:
34
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