IDEAS home Printed from https://ideas.repec.org/p/een/camaaa/2026-32.html

Sectoral Heterogeneity in the International Transmission of Monetary Policy

Author

Listed:
  • Ozan Eksi
  • K. Peren Arin
  • Neslihan Kaya Eksi
  • Moo-Sung Kim

Abstract

This paper investigates the international transmission of Federal Reserve monetary policy shocks to European firms across four firm-level outcomes: investment, sales growth, profit margins, and debt growth. Using high-frequency identification of Fed shocks combined with local projections on firm-level panel data from five Eurozone countries over 2004-2024, we find that Fed tightening reduces investment and sales, leaves profit margins largely unchanged, and increases debt accumulation. These effects are broadly observed across sectors, with Wholesale Retail Trade and Manufacturing somewhat more affected, while Agriculture, Forestry, Fishing, and Services (Health and Education) remain largely irresponsive across all outcomes. The Finance, Insurance, and Real Estate sector is a notable exception, exhibiting a positive investment response to Fed tightening. All results are robust to controlling for concurrent ECB policy shocks, highlighting the independent global reach of U.S. monetary policy through international credit and dollar funding channels.

Suggested Citation

  • Ozan Eksi & K. Peren Arin & Neslihan Kaya Eksi & Moo-Sung Kim, 2026. "Sectoral Heterogeneity in the International Transmission of Monetary Policy," CAMA Working Papers 2026-32, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2026-32
    as

    Download full text from publisher

    File URL: https://crawford.anu.edu.au/sites/default/files/2026-05/32_2026_EksiO_Arin_EksiNK_Kim.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:een:camaaa:2026-32. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cama Admin (email available below). General contact details of provider: https://edirc.repec.org/data/asanuau.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.