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Corporate Interest Rates and the Financial Accelerator in the Czech Republic

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  • Jarko Fidrmuc
  • Roman Horváth
  • Eva Horváthová

Abstract

We analyze the determinants of corporate interest rates and the financial accelerator in the Czech Republic. Using a unique panel of 448 Czech firms from 1996 to 2002, we find that selected balance sheet indicators significantly influence the firmspecific interest rates. Debt structure and cash flow have significant effects on interest rates, whereas indicators on collateral play no significant role. Monetary policy has stronger effects on smaller firms than on medium-size and larger firms. Finally, we find no asymmetric effects in the monetary policy over the business cycle.

Suggested Citation

  • Jarko Fidrmuc & Roman Horváth & Eva Horváthová, 2010. "Corporate Interest Rates and the Financial Accelerator in the Czech Republic," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(4), pages 41-54, January.
  • Handle: RePEc:mes:emfitr:v:46:y:2010:i:4:p:41-54
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    Cited by:

    1. Vít Pošta & Zdeněk Pikhart, 2015. "Financial Risk and Real Variables: Evidence Based on a SVAR Analysis of the Czech Economy," Prague Economic Papers, University of Economics, Prague, vol. 2015(5), pages 516-537.
    2. Magdalena Morgese Borys & Petr ZemÄÂik, 2011. "Size and Value Effects in the Visegrad Countries," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(3), pages 50-68, May.
    3. Magdalena Morgese Borys & Petr ZemÄ ik, 2011. "Size and Value Effects in the Visegrad Countries," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(3), pages 50-68, May.
    4. Lucie Reznakova & Svatopluk Kapounek, 2014. "Is There a Credit Crunch in the Czech Republic?," MENDELU Working Papers in Business and Economics 2014-50, Mendel University in Brno, Faculty of Business and Economics.
    5. Jan Babecky & Alena Bicakova & Alexis Derviz & Tomas Havranek & Roman Horvath & Lubos Komarek & Zlatuse Komarkova & Jakub Mateju & Ke Pang & Renata Pasalicova & Zuzana Prelcova & Marie Rakova & Pierre, 2011. "Macro-Financial Linkages: Theory and Applications," Occasional Publications - Edited Volumes, Czech National Bank, Research Department, edition 2, volume 9, number rb09/2 edited by Jan Babecky.
    6. Fidrmuc, Jarko & Hainz, Christa, 2010. "Default rates in the loan market for SMEs: Evidence from Slovakia," Economic Systems, Elsevier, vol. 34(2), pages 133-147, June.
    7. Ruslan Aliyev & Dana Hajkova & Ivana Kubicova, 2015. "The Impact of Monetary Policy on Financing of Czech Firms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 65(6), pages 455-476, December.
    8. repec:prg:jnlpep:v:2015:y:2015:i:5:id:513:p:1-22 is not listed on IDEAS
    9. Pinar Özlü & Cihan Yalçin, 2012. "The Trade Credit Channel of Monetary Policy Transmission: Evidence from Nonfinancial Manufacturing Firms in Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(4), pages 102-117, July.
    10. Katerina Arnostova & Jozef Barunik & Jan Filacek & Michal Franta & David Havrlant & Roman Horvath & Filip Novotny & Marie Rakova & Lubos Ruzicka & Branislav Saxa & Katerina Smidkova & Peter Toth, 2012. "Macroeconomic Forecasting: Methods, Accuracy and Coordination," Occasional Publications - Edited Volumes, Czech National Bank, Research Department, edition 1, volume 10, number rb10/1 edited by Jan Babecky.
    11. Pinar Özlü & Cihan Yalçin, 2012. "The Trade Credit Channel of Monetary Policy Transmission: Evidence from Nonfinancial Manufacturing Firms in Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(4), pages 102-117, July.
    12. Laivi Laidroo, 2014. "Lending Growth and Cyclicality in Central and Eastern European Banks," TUT Economic Research Series 13, Department of Finance and Economics, Tallinn University of Technology.
    13. repec:prg:jnlpep:v:preprint:id:513:p:1-22 is not listed on IDEAS

    More about this item

    Keywords

    balance sheet channel; corporate interest rates; financial accelerator monetary policy transmission;

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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