The Micro Impact of Macroprudential Policies: Firm-Level Evidence

Meghana Ayyagari, Thorsten Beck and Maria Martinez Peria

No 2018/267, IMF Working Papers from International Monetary Fund

Abstract: Combining balance sheet data on 900,000 firms from 48 countries with information on the adoption of macroprudential policies during 2003-2011, we find that these policies are associated with lower credit growth. These effects are especially significant for micro, small and medium enterprises (MSMEs) and young firms that, according to the literature, are more financially constrained and bank dependent. Among MSMEs and young firms, those with weaker balance sheets exhibit lower credit growth in conjunction with the adoption of macroprudential policies, suggesting that these policies can enhance financial stability. Finally, our results show that macroprudential policies have real effects, as they are associated with lower investment and sales growth.

Keywords: WP; financing growth; firm assets; micro firm; balance sheet data; financing constraint; firm characteristic; return on assets; financial development; macroprudential policies; firm financing; Macroprudential policy; Macroprudential policy instruments; Small and medium enterprises; Global financial crisis of 2008-2009; Central bank policy rate; Global (search for similar items in EconPapers)
Pages: 65
Date: 2018-12-07
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Citations: View citations in EconPapers (29)

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