The Micro Impact of Macroprudential Policies: Firm-Level Evidence

Author/Editor:

Meghana Ayyagari ; Thorsten Beck ; Maria Soledad Martinez Peria

Publication Date:

December 7, 2018

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Combining balance sheet data on 900,000 firms from 48 countries with information on the adoption of macroprudential policies during 2003-2011, we find that these policies are associated with lower credit growth. These effects are especially significant for micro, small and medium enterprises (MSMEs) and young firms that, according to the literature, are more financially constrained and bank dependent. Among MSMEs and young firms, those with weaker balance sheets exhibit lower credit growth in conjunction with the adoption of macroprudential policies, suggesting that these policies can enhance financial stability. Finally, our results show that macroprudential policies have real effects, as they are associated with lower investment and sales growth.

Series:

Working Paper No. 18/267

Subject:

English

Publication Date:

December 7, 2018

ISBN/ISSN:

9781484385654/1018-5941

Stock No:

WPIEA2018267

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

65

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