Quantitative Easing and Corporate Innovation

Niklas Grimm, Luc Laeven and Alexander Popov

No 17280, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We document a strong and heterogeneous response of corporate R&D investment to changes in debt financing conditions induced by the Corporate Sector Purchase Programme (CSPP), the ECB’s Quantitative Easing Program. Firms eligible for the program increase their spending on R&D, relative to similar ineligible firms operating in the same country and sector. This effect does not predate the CSPP, and it is absent in a sample of similar non-euro-area firms. The increase in productivity-enhancing investment is concentrated among firms that are financially constrained, less innovative, and more reliant on bond financing.

Keywords: Corporate innovation; Real effects; Unconventional monetary policy; Asset purchases (search for similar items in EconPapers)
JEL-codes: E5 G10 O3 (search for similar items in EconPapers)
Date: 2022-05
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Working Paper: Quantitative easing and corporate innovation (2021)
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