Firm Investment, Financial Constraints and Monetary Transmission: An Investigation with Czech Firm-Level Data
Oxana Babecká-Kucharčuková and
Working Papers from Czech National Bank
This project investigates the effect of financial constraints and monetary policy on firms' investment behaviour using Czech firm-level data. The empirical specification is based on the dynamic neoclassical investment model, which explains investment by sales and cash flow. In addition, it includes financial constraints and other factors. We differentiate firms according to their size and type of economic activity. We find that indebtedness and availability of liquidity have significant effects on investment. In the post-crisis period firms obtained less additional credit due to greater riskiness and tended to accumulate more liquidity. Expectations about future GDP growth and business sentiment are positively related to investment. At the same time, we observe considerable heterogeneity of the results across sectors. The impact of the short-term real interest rate is highly significant for firms of all sizes and in all important sectors of the Czech economy, reflecting monetary policy effectiveness.
Keywords: Financial constraints; firms; indebtedness; investment; liquidity; monetary policy (search for similar items in EconPapers)
JEL-codes: D22 E5 E22 G3 G32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-mac, nep-mon, nep-sbm and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://www.cnb.cz/export/sites/cnb/en/economic-re ... wp/cnbwp_2017_16.pdf
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2017/16
Access Statistics for this paper
More papers in Working Papers from Czech National Bank Contact information at EDIRC.
Bibliographic data for series maintained by Jan Babecky ().