Monetary Policy Shocks and Firms' Investment Decisions

Klaus Abberger, Alexander Rathke, Samad Sarferaz and Pascal Seiler

No 12099, CESifo Working Paper Series from CESifo

Abstract: We study the investment channel of monetary policy through a randomized survey experiment, exposing Swiss firms directly to shocks to the Swiss National Bank's policy rate. Our survey experiment randomizes pure policy-rate shocks - uncontaminated by information effects - and records firms' revisions to investment plans and financing choices. We find pronounced asymmetry: firms respond strongly to unanticipated rate hikes but only moderately to equivalent cuts. This asymmetry varies with firm size, sector, export intensity, and investment types. Investment financing shapes the response: reliance on internal funds and being financially unconstrained amplifies investment sensitivity.

Keywords: monetary policy; investment; firm heterogeneity; survey experiment; external finance; randomized control trial (search for similar items in EconPapers)
JEL-codes: C93 D22 E22 E52 G32 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-cba, nep-exp, nep-iaf and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12099

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