This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Investment Finance and Monetary Policy in Europe

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Cobham, Alex () (Finance and Trade Policy Research Centre, University of Oxford)

Additional information is available for the following registered author(s):

Abstract

This paper assesses the different investment responses to monetary policy and external financing of firms of different sizes in the main EMU member economies. The finding that smaller firms are more sensitive to tight monetary policy is confirmed by analysis of the determinants of their cost of capital. Further regression analysis (using a panel of balance sheet data) shows that the level of investment is highly dependent on the net sources of finance. Greater reliance on internal funds reduces investment for all sizes of firms, while long-term debt is more important for small and medium than large firms, but equity is more important for medium and large firms than for small. Cobham (2004) identified a shift in long-term debt financing towards large firms, but the results here suggest that the benefits of this are likely to be minimal while the costs in foregone investment could be substantial.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.intech.unu.edu/publications/eifc-tf-papers/eifc04-39.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by United Nations University, Institute for New Technologies in its series EIFC - Technology and Finance Working Papers with number 39.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 2004
Date of revision:
Handle: RePEc:dgr:unutaf:eifc04-39

Contact details of provider:
Web page: http://www.intech.unu.edu

For technical questions regarding this item, or to correct its listing, contact: (Ad Notten).

Related research
Keywords: Monetary Policy; Corporate Investment; Cost of Capital; EMU; Debt;

Other versions of this item:

This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Mayer, Colin, 1988. "New issues in corporate finance," European Economic Review, Elsevier, vol. 32(5), pages 1167-1183, June. [Downloadable!] (restricted)
    Other versions:
  2. Gertler, Mark & Gilchrist, Simon, 1994. "Monetary Policy, Business Cycles, and the Behavior of Small Manufacturing Firms," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 309-40, May. [Downloadable!] (restricted)
    Other versions:
  3. Kashyap, Anil K. & Stein, Jeremy C., 1995. "The impact of monetary policy on bank balance sheets," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 151-195, June. [Downloadable!] (restricted)
    Other versions:
  4. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-86, June. [Downloadable!] (restricted)
    Other versions:
  5. Cobham, Alex, 2001. "EMU, Monetary Policy and the Role of Financial Constraints," EIFC - Technology and Finance Working Papers 6, United Nations University, Institute for New Technologies. [Downloadable!]
  6. Corbett, Jenny & Jenkinson, Tim, 1997. "How Is Investment Financed? A Study of Germany, Japan, the United Kingdom and the United States," The Manchester School of Economic & Social Studies, Blackwell Publishing, vol. 65(0), pages 69-93, Supplemen.
  7. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June. [Downloadable!] (restricted)
  8. Anil K. Kashyap & Jeremy C. Stein, 1997. "The role of banks in monetary policy: a survey with implications for the European Monetary Union," Economic Perspectives, Federal Reserve Bank of Chicago, issue Sep, pages 2-18. [Downloadable!]
Full references

Statistics
Access and download statistics

Did you know? All top Economics journals are listed on RePEc.

This page was last updated on 2009-12-2.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.