Does Monetary Policy Affect A Firm’s Investment Through Leverage? Micro Evidence for India

Saibal Ghosh and Saurabh Ghosh

Economia Internazionale / International Economics, 2006, vol. 59, issue 1, 17-31

Abstract: The paper investigates whether the effects of monetary policy on firm investment can be transmitted through leverage. The findings indicate that monetary contractions reduce investment for highly leveraged firms. The estimates imply that a 1 percentage point tightening of liquidity reduces investment by 0.4% through leverage.

JEL-codes: C33 E52 G32 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (2)

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