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Monetary policy and corporate financialization: Does banking uncertainty matter?

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  • Huynh, Japan

Abstract

This paper examines the link between monetary policy and corporate financialization, with a focus on the moderating role of banking uncertainty. Using data from Vietnam during 2007–2023, we find that expansionary monetary policy significantly increases firms' financial investments. Our results show that banking uncertainty amplifies this effect, suggesting that firms respond more strongly to monetary easing when faced with higher uncertainty in the banking sector. Further heterogeneity tests reveal that the strengthening effect of banking uncertainty on the impact of monetary policy is more pronounced for smaller firms and firms with a higher level of bank debt. These results highlight the importance of considering firm characteristics and financial conditions when assessing monetary policy transmission, especially in bank-based markets with heightened uncertainty.

Suggested Citation

  • Huynh, Japan, 2026. "Monetary policy and corporate financialization: Does banking uncertainty matter?," Research in International Business and Finance, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:riibaf:v:87:y:2026:i:c:s0275531926001170
    DOI: 10.1016/j.ribaf.2026.103390
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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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