International Reserve Management and Firm Investment in Emerging Market Economies
Joshua Aizenman,
Yin-Wong Cheung and
Xingwang Qian
No 29303, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
We examine the effects of active international reserve management (IRM) conducted by central banks of emerging market economies (EMEs) on firm investment in the presence of global financial shocks. Using firm-level data from 46 EMEs from 2000 to 2018, we document three findings. First, active IRM is found to affect firm investment positively. The effect strengthens when the magnitude of adverse external financial shocks increases. Second, financially constrained firms, compared to unconstrained ones, are less responsive to active IRM. Third, we find that 30% of the causal effect of IRM on firm investment is mediated through the country credit spread channel.
JEL-codes: F36 F42 F61 G31 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cwa, nep-fdg, nep-ifn, nep-mon and nep-opm
Note: IFM
References: Add references at CitEc
Citations:
Downloads: (external link)
http://www.nber.org/papers/w29303.pdf (application/pdf)
Related works:
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:nbr:nberwo:29303
Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w29303
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().