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Monetary Policy, Corporate Financial Composition and Real Activity

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  • Paul Mizen
  • Cihan Yalcin

Abstract

This paper addresses two fundamental questions about monetary policy, credit conditions and corporate activity. First, can we relate differences in the composition of debt between tight and loose periods of monetary policy to firm characteristics like size, age, indebtedness or risk? Second, do differences in companies’ financial compositions matter for real activity of firms such as inventory and employment growth? The paper offers some evidence from firms in the UK manufacturing sector which suggests the composition of debt differs considerably with characteristics such as size, age, debt and risk, it also shows a significant effect from financial composition and cash flow to inventory and employment growth.

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File URL: http://www.tcmb.gov.tr/research/discus/WP0601ENG.pdf
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Bibliographic Info

Paper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 0601.

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Date of creation: 2006
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Handle: RePEc:tcb:wpaper:0601

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Keywords: Monetary Policy; Inventory Investment; Employment; Firm Type;

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References

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Cited by:
  1. Pinar Ozlu & Cihan Yalcin, 2010. "The Trade Credit Channel of Monetary Policy Transmission: Evidence from Non-Financial Firms in Turkey (Firma Ticari Borclari ve Kredi Aktarim Mekanizmasi: Turkiye Ornegi)," Working Papers 1016, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.

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