Abdul Karim, Zulkefly (2010): Monetary policy and firms’ investment: Dynamic panel data evidence from Malaysia.
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This study examines the effects of monetary policy on firms’ balance sheet, with a particular focus on the effects upon the firms’ fixed-investment spending. It uses a dynamic panel system GMM estimation proposed by Blundell and Bond (1998). The focal point has given to the two main channels of monetary policy transmission mechanism such as interest rates and broad credit channel in transmitting to firm investment spending. By estimating the firms’ investment model using a dynamic neo-classical framework, the empirical results tend to support the relevance of interest rates and broad credit channel in transmitting to the firm balance sheet condition that is firm’s investment spending. The results also reveal that the effect of monetary policy channels to the firms’ investment are heterogeneous fashioned, which is the small firms who faced financial constraint are responded more due to monetary tightening as compared to the large firm (less constraint firms). Thus, the monetary authority has to concern the microeconomic aspects of the firm in formulation their monetary policy.
|Item Type:||MPRA Paper|
|Original Title:||Monetary policy and firms’ investment: Dynamic panel data evidence from Malaysia|
|Keywords:||Monetary policy, Financial Constraint, Firm Investment, Dynamic Panel Data|
|Subjects:||C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy
D - Microeconomics > D9 - Intertemporal Choice and Growth > D92 - Intertemporal Firm Choice and Growth, Financing, Investment, and Capacity
|Depositing User:||Zulkefly Abdul Karim|
|Date Deposited:||19. Jul 2010 15:36|
|Last Modified:||14. Feb 2013 00:45|
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