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Quantitative Easing and Corporate Innovation

Author

Listed:
  • Grimm, Niklas
  • Laeven, Luc
  • Popov, Alexander

Abstract

We document a strong and heterogeneous response of corporate R&D investment to changes in debt financing conditions induced by corporate debt purchases under the ECB's QE Program. Companies eligible for the program increase significantly their investment in R&D, relative to similar ineligible companies operating in the same country and sector. This effect is limited to firms with low leverage and with high levels of prior innovation. In contrast, QE-eligible companies with no history of innovation only increase dividend payments. Finally, credit constraints do not appear to matter for the response of R&D investment to QE.

Suggested Citation

  • Grimm, Niklas & Laeven, Luc & Popov, Alexander, 2022. "Quantitative Easing and Corporate Innovation," CEPR Discussion Papers 17280, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17280
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    Cited by:

    1. is not listed on IDEAS
    2. Aghion, Philippe & Boneva, Lena & Breckenfelder, Johannes & Laeven, Luc & Olovsson, Conny & Popov, Alexander & Rancoita, Elena, 2022. "Financial Markets and Green Innovation," Working Paper Series 2686, European Central Bank.
    3. Klein, Mathias & Zhang, Xin, 2025. "The Inflationary Effects of Quantitative Easing," Working Paper Series 447, Sveriges Riksbank (Central Bank of Sweden).
    4. repec:ecb:ecbdps:202219 is not listed on IDEAS
    5. Schmöller, Michaela & Goldfayn-Frank, Olga & Schmidt, Tobias, 2025. "Beyond the short run: Monetary policy and innovation investment," Discussion Papers 18/2025, Deutsche Bundesbank.

    More about this item

    Keywords

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    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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