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Do SMEs Benefit from Unconventional Monetary Policy and How? Microevidence from the Eurozone

Annalisa Ferrando, Alexander Popov () and Gregory F. Udell

Journal of Money, Credit and Banking, 2019, vol. 51, issue 4, 895-928

Abstract: We study the impact of the announcement of the European Central Bank's (ECB's) Outright Monetary Transactions Program on small firms’ access to finance using a matched firm‐bank data set from eight Eurozone countries. We find that following the announcement, credit access improved relatively more for firms borrowing from banks with high balance sheet exposures to impaired sovereign debt, with such firms less likely to be refused a loan or to be price rationed. Loan terms also improved as manifested by lengthening of loan maturities. Unconventional monetary policy has a positive impact on firms’ investment and profitability, while its effect on firm innovation is weaker.

Date: 2019
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Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

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Handle: RePEc:wly:jmoncb:v:51:y:2019:i:4:p:895-928