Quantitative Easing and Corporate Innovation

Niklas Grimm, Luc Laeven and Alexander Popov

No 17280, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We document a strong and heterogeneous response of corporate R&D investment to changes in debt financing conditions induced by corporate debt purchases under the ECB's QE Program. Companies eligible for the program increase significantly their investment in R&D, relative to similar ineligible companies operating in the same country and sector. This effect is limited to firms with low leverage and with high levels of prior innovation. In contrast, QE-eligible companies with no history of innovation only increase dividend payments. Finally, credit constraints do not appear to matter for the response of R&D investment to QE.

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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