Monetary policy transmission to firms’ investments — It may depend on the tool
Laine, Olli-Matti (15.06.2023)
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Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-202109131529
This letter studies monetary policy transmission to public companies’ investments in the euro area using firm-level data. Rate hikes are estimated to decrease investments. When it comes to unconventional monetary policy tools, no statistically significant effect on the average firm’s investments is found. However, there is heterogeneity across firms: all the assessed monetary policy tools are estimated to affect firms with low leverage and high market capital. When it comes to firms’ profitability, no evidence about heterogenous effects is found. The results are different when it comes to employment.