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Quantitative easing and corporate innovation

Niklas Grimm, Luc Laeven and Alexander Popov

No 2615, Working Paper Series from European Central Bank

Abstract: To what extent can Quantitative Easing impact productivity growth? 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 Corporate Sector Purchase 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. The evidence further suggests that by subsidizing the cost of debt, corporate bond purchases by the central bank stimulate innovation through a wealth transfer to innovative companies with low debt levels, rather than by supporting credit constrained firms. JEL Classification: E5, G10, O3

Keywords: corporate innovation; productivity growth; quantitative easing; unconventional monetary policy (search for similar items in EconPapers)
Date: 2021-11
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec, nep-fdg, nep-ino, nep-mac, nep-mon and nep-tid
Note: 261593
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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