The paper investigates whether the effects of monetary policy on firm investment can be transmitted through leverage. The findings indicate that monetary contractions reduce investment for highly leveraged firms. The estimates imply that a 1percentage point increase in leverage reduces investment by 0.109 percent through leverage. Robustness tests broadly validate these findings.
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
17181.
Length: Date of creation: 2006 Date of revision: Publication status: Published in Economia Internazionale 1.54(2006): pp. 17-32 Handle: RePEc:pra:mprapa:17181
Find related papers by JEL classification: G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
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