Monetary Policy in an Open Economy: The Differential Impact on Exporting and Non-Exporting Firms

Oved Yosha, Hedva Ber and Asher Blass ()

No 3191, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Using firm-level data, we provide evidence that, although monetary policy affects real investment, the effect operates differentially: the greater its export intensity the less a firm is affected by tight money. We examine several interpretations and conclude that the impact is transmitted primarily through the supply side due to differential access to credit markets. This finding lends support to the commonplace view that monetary policy is less effective the more open the economy.

Keywords: Interest rate; investment; Corporate finance; Leverage; Liquidity; Tobin's q; Publicly traded firms (search for similar items in EconPapers)
JEL-codes: D20 E44 (search for similar items in EconPapers)
Date: 2002-02
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (18)

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