Monetary transmission: empirical evidence from Luxembourg firm level data

Patrick Lünnemann and Thomas Mathä

No 111, Working Paper Series from European Central Bank

Abstract: This paper investigates the transmission of monetary policy using data from a panel of Luxembourg firms. The results indicate that the sales accelerator may be at work. A very robust result is the negative effect of the user cost of capital on firms' investment ratio. Changes in user costs are significantly affected by changes in the monetary policy indicator. In addition, firm specific balance sheet characteristics, such as the lagged cash stock to capital ratio influence the investment behaviour according to the broad credit channel theory. Using various sample splits, it is shown that young firms, in particular, are more sensitive to user cost changes, sales growth and the lagged cash to capital ratio. JEL Classification: D21, D92, E22, E52

Keywords: credit channel; investment; Panel data; user cost of capital (search for similar items in EconPapers)
Date: 2001-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp111.pdf (application/pdf)

Related works:
Working Paper: Monetary transmission: empirical evidence from Luxembourg firm-level data (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:2001111

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().