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Do SMEs Benefit from Unconventional Monetary Policy and How? Microevidence from the Eurozone

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  • ANNALISA FERRANDO
  • ALEXANDER POPOV
  • GREGORY F. UDELL

Abstract

We study the impact of the announcement of the European Central Bank's (ECB's) Outright Monetary Transactions Program on small firms’ access to finance using a matched firm‐bank data set from eight Eurozone countries. We find that following the announcement, credit access improved relatively more for firms borrowing from banks with high balance sheet exposures to impaired sovereign debt, with such firms less likely to be refused a loan or to be price rationed. Loan terms also improved as manifested by lengthening of loan maturities. Unconventional monetary policy has a positive impact on firms’ investment and profitability, while its effect on firm innovation is weaker.

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  • Annalisa Ferrando & Alexander Popov & Gregory F. Udell, 2019. "Do SMEs Benefit from Unconventional Monetary Policy and How? Microevidence from the Eurozone," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(4), pages 895-928, June.
    • Handle: RePEc:wly:jmoncb:v:51:y:2019:i:4:p:895-928
    DOI: 10.1111/jmcb.12581
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