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Financial Accelerator Effects in the Balance Sheets of Czech Firms

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  • Roman Horv??th

Abstract

The paper examines a financial accelerator mechanism in analyzing determinants of corporate interest rates. Using a panel of the financial statements of 448 Czech firms from 1996???2002, we find that balance sheet indicators matter for the interest rates paid by firms. Market access is particularly important in this regard. The strength of corporate balance sheets seem to vary with firm size. There is also evidence that monetary policy has a stronger effect on smaller than on larger firms. On the other hand, we find no asymmetry in the monetary policy effects over the business cycle.

Suggested Citation

  • Roman Horv??th, 2006. "Financial Accelerator Effects in the Balance Sheets of Czech Firms," William Davidson Institute Working Papers Series wp847, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2006-847
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    Cited by:

    1. Adam GERŠL, 2008. "Productivity, Export Performance, and Financing of the Czech Corporate Sector: The Effects of Foreign Direct Investment," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(05-06), pages 232-247, August.
    2. Mr. Alvaro Piris Chavarri, 2010. "Investment by Large Firms in Argentina," IMF Working Papers 2010/003, International Monetary Fund.
    3. Defne Mutluer Kurul & Koray Alper, 2010. "Kuresel Kriz ve Kredi Egilimleri," CBT Research Notes in Economics 1002, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.

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    More about this item

    Keywords

    balance sheet channel; financial accelerator; interest rates; monetary policy transmission;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • 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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