IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Does the credit channel work in Europe? A study based on the heterogeneity of investment behaviours from aggregated balance-sheet data

Listed author(s):

    (Caisse National du Crédit Agricole)

  • Th. HECKEL


Registered author(s):

    This article studies the impact of monetary policy on real economy in Europe through a particular transmission mechanism: the credit channel. The credit channel is based on the existence of information asymmetries in financial markets that change the agents financing conditions. According to the credit channel theory, investment elasticity to cash flow should increase following tight monetary periods, especially in small firms. We test this prediction of the credit channel by estimating a classical investment model (accelerator-profit) on a pseudo-panel database harmonised among European countries by the European Commission (BACH database). This data set includes firms balance sheet aggregated by industry and size in many European countries (Germany, France, Italy, Spain, Netherlands, Belgium, Austria and Portugal). Our results show that investment sensitivity to financing conditions is consistent with the credit channel theory and that this transmission channel of monetary chocks is a source of asymmetry in Europe between countries and between firms of different sizes.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: Document de travail de la DESE numéro G2001-04
    Download Restriction: no

    Paper provided by Institut National de la Statistique et des Etudes Economiques, DESE in its series Documents de Travail de la DESE - Working Papers of the DESE with number g2001-04.

    in new window

    Date of creation: 2001
    Handle: RePEc:crs:wpdeee:g2001-04
    Contact details of provider: Postal:
    15 Boulevard Gabriel Peri 92244 Malakoff Cedex

    Phone: 01 41 17 50 50
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:crs:wpdeee:g2001-04. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (D3E)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.