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The Impact of Monetary Policy on Financing of Czech Firms

Author

Listed:
  • Ruslan Aliyev

    (ADA University, Baku
    CERGE-EI, Prague)

  • Dana Hajkova

    (Ceska sporitelna, a.s.)

  • Ivana Kubicova

    (Czech National Bank)

Abstract

This paper uses firm-level financial data for Czech firms in the period from 2003 to 2011 and tests for the role of companies' financial structure in the transmission of monetary policy. Our results indicate that higher short-term interest rates coincide with lower shares of total debt and long-term debt and higher shares of short-term bank loans and trade credit. We find that firm-specific characteristics, such as size, age, collateral and profit affect the way monetary policy influences the external financing decisions of firms. These findings indicate the presence of informational frictions in credit markets and thus provide some empirical evidence of the existence of a broad credit channel in the Czech Republic.

Suggested Citation

  • Ruslan Aliyev & Dana Hajkova & Ivana Kubicova, 2015. "The Impact of Monetary Policy on Financing of Czech Firms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 65(6), pages 455-476, December.
    • Handle: RePEc:fau:fauart:v:65:y:2015:i:6:p:455-476
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    References listed on IDEAS

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    Cited by:

    1. Kajurová Veronika & Linnertová Dagmar, 2018. "Loose Monetary Policy and Corporate Investment of Manufacturing Firms in the Czech Republic," Review of Economic Perspectives, Sciendo, vol. 18(4), pages 371-385, December.
    2. repec:cnb:ocpubv:rb15/2 is not listed on IDEAS
    3. Veronika Kajurova & Dagmar Linnertova, 2018. "The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms," ACTA VSFS, University of Finance and Administration, vol. 12(1), pages 43-73.
    4. Michal Brzozowski, 2019. "Access to Credit and Growth of Firms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(3), pages 253-274, June.

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    More about this item

    Keywords

    monetary policy transmission; broad credit view; external finance; Czech Republic;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • 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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