The Balance Sheet Channel of Monetary Policy Transmission: Evidence from the United Kingdom
AbstractThis paper examines the cash flow sensitivity of investment using a panel of UK manufacturing firms to investigate the existence of a balance sheet channel. In addition to examining the impact of cash flow in different subsamples based on company size or financial policy, we investigate the extent to which investment becomes more sensitive to cash flow in periods of monetary tightness by employing a narrative indicator constructed for the United Kingdom. The results indicate that cash flow sensitivity in financially constrained firms is higher during periods of tight monetary policy and that financial constraints weaken with financial market sophistication. Copyright (c) The London School of Economics and Political Science 2008.
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Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 76 (2009)
Issue (Month): 304 (October)
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- Uluc Aysun & Ralf Hepp, 2010.
"Securitization and the Balance Sheet Channel of Monetary Transmission,"
Fordham Economics Discussion Paper Series
dp2010-05, Fordham University, Department of Economics.
- Aysun, Uluc & Hepp, Ralf, 2011. "Securitization and the balance sheet channel of monetary transmission," Journal of Banking & Finance, Elsevier, vol. 35(8), pages 2111-2122, August.
- Uluc Aysun & Melanie Guldi & Ralf Hepp, 2010. "Securitization and the balance sheet channel of monetary transmission," Working papers 2010-18, University of Connecticut, Department of Economics.
- Sami Alpanda & Uluc Aysun, 2012.
"Global Banking and the Balance Sheet Channel of Monetary Transmission,"
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International Journal of Central Banking, vol. 8(3), pages 141-175, September.
- Uluc Aysun & Sami Alpanda, 2011. "Global banking and the balance sheet channel of monetary transmission," Working Papers 2011-04, University of Central Florida, Department of Economics.
- Aysun, Uluc & Hepp, Ralf, 2013. "Identifying the balance sheet and the lending channels of monetary transmission: A loan-level analysis," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2812-2822.
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