Microeconometric Evidence for a German Credit Channel
This paper investigates monetary policy transmission at the microeconometric level. The credit rationing literature suggests that monetary policy has a larger effects on firms which are credit constrained. I use a large panel of German industrial firms to investigate whether this is empirically true in the German case. Whereas interest rates have only a weak effect on investment, I find strong evidence that monetary policy affects constrained firms more than others. Furthermore, investment is more sensitive to financial structure in periods of tight monetary policy. This contrasts earlier findings by Stöß (1996). The same result applies for periods of monetary tightness. I conclude that the credit channel is dominant in Germany. Given the findings for other countries this result indicates that financial systems in the Euro area are less different than suggested in previous studies.
|Date of creation:||Jan 2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: : +49 (0)40 42838-4674
Fax: +49 (0)40 42838-5546
Web page: http://www.uni-hamburg.de/onTEAM/grafik/1223630633/RePec/ham
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ham:qmwops:20002. 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: ()
If references are entirely missing, you can add them using this form.