Firm-Level Data and Monetary Policy: The Case of a Middle Income Country

Author/Editor:

Lahcen Bounader ; Mohamed Doukali

Publication Date:

November 1, 2019

Electronic Access:

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Summary:

We test the existence of the balance sheet channel of monetary policy in a middle-income country. Firm-level data scarcity and quality, in such a context, make the identification of this channel a steep challenge. To circumvent this challenge, we use panel instrumental variables estimation with measurement error to analyze the financial statements of 58 500 Moroccan firms over the period 2010-2016. Our analysis confirms the existence of this channel. It shows that monetary policy has a significant impact on small and medium enterprises’ access to banks’ financing, and that firm-specific variables are key determinants of firms’ financing decisions.

Series:

Working Paper No. 19/239

Subject:

English

Publication Date:

November 1, 2019

ISBN/ISSN:

9781513518862/1018-5941

Stock No:

WPIEA2019239

Format:

Paper

Pages:

34

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