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Monetary policy shocks and corporate cash holdings: New European evidence

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  • Apergis, Nicholas

Abstract

This paper explores the effect of ECB monetary policy shocks on eurozone corporate cash holdings. Through the identification approach, we document that shocks have mixed effects, while previous research was supporting either direction.

Suggested Citation

  • Apergis, Nicholas, 2024. "Monetary policy shocks and corporate cash holdings: New European evidence," Economics Letters, Elsevier, vol. 237(C).
    • Handle: RePEc:eee:ecolet:v:237:y:2024:i:c:s0165176524001162
    DOI: 10.1016/j.econlet.2024.111633
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    References listed on IDEAS

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    1. Thomas W. Bates & Kathleen M. Kahle & René M. Stulz, 2009. "Why Do U.S. Firms Hold So Much More Cash than They Used To?," Journal of Finance, American Finance Association, vol. 64(5), pages 1985-2021, October.
    2. Alexander Jung & Patrick Kuehl, 2021. "Can central bank communication help to stabilise inflation expectations?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(3), pages 298-321, July.
    3. Jarrad Harford & Sandy Klasa & William F. Maxwell, 2014. "Refinancing Risk and Cash Holdings," Journal of Finance, American Finance Association, vol. 69(3), pages 975-1012, June.
    4. Steven A. Sharpe & Gustavo A. Suarez, 2021. "Why Isn’t Business Investment More Sensitive to Interest Rates? Evidence from Surveys," Management Science, INFORMS, vol. 67(2), pages 720-741, February.
    5. Monika Piazzesi, 2002. "The Fed and Interest Rates - A High-Frequency Identification," American Economic Review, American Economic Association, vol. 92(2), pages 90-95, May.
    6. Jung, Alexander, 2023. "Are monetary policy shocks causal to bank health? Evidence from the euro area," Journal of Macroeconomics, Elsevier, vol. 75(C).
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    Cited by:

    1. Liu, Yulin & Cao, Zhiling & Wen, Fenghua, 2024. "Textual similarity between firm and government: Measurement and pricing," Economics Letters, Elsevier, vol. 241(C).

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    More about this item

    Keywords

    Cash holdings; ECB monetary policy shocks; Identification approach; Eurozone firms;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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