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Monetary Policy Influence on Companies’ Competitiveness through Credit Channel

Author

Listed:
  • V. Kolmakov
  • K. Ekimova
  • K. Ordov
  • A. Aliev
  • N. Tchuykova

Abstract

We contribute to the studies of monetary policy transmission mechanisms’ influence on real sector competitiveness. Monetary policy changes influence credit availability and affordability to enterprises and thus transmits impacts to the real sector competitiveness. Using the Russian market data, we derived several lagged regression and VAR models to estimate the extent of corporate competitiveness dependency on credit extension or shrinking. Our findings comprise the conclusion that monetary policy changes affecting the money supply (M2) having positive impact on the volumes of credit extended to enterprises and on the net change of bank loans debt together denoted as ‘credit channel breadth’. Changes of the latter inspire changes of several dimensions of corporate competitiveness – capital expenditure and fixed assets’ purchase value, since companies facing the liquidity changes revise their attitude to liquidity and profitability tradeoff.

Suggested Citation

  • V. Kolmakov & K. Ekimova & K. Ordov & A. Aliev & N. Tchuykova, 2018. "Monetary Policy Influence on Companies’ Competitiveness through Credit Channel," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 614-623.
    • Handle: RePEc:ers:journl:v:xxi:y:2018:i:special2:p:614-623
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    References listed on IDEAS

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    More about this item

    Keywords

    Monetary policy; transmission mechanism; competitiveness; credit channel; VAR model; capital expenditure.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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