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Corporate Interest Rates and the Financial Accelerator in the Czech Republic

  • Fidrmuc, Jarko
  • Horváth, Roman
  • Horváthová, Eva

We analyze the determinants of the 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 influence significantly the firm-specific interest rates. In particular, debt structure and cash flow have significant effects on interest rates, while indicators on collateral play no significant role. We find evidence that monetary policy has stronger effects on smaller firms than on medium and larger firms. Finally, we find no asymmetric effects in the monetary policy over the business cycle.

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File URL: http://epub.ub.uni-muenchen.de/7191/1/LMU0823-czinterest.pdf
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Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 7191.

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Date of creation: 05 Nov 2008
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Handle: RePEc:lmu:muenec:7191
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  1. Mark Gertler & Simon Gilchrist, 1991. "Monetary Policy, Business Cycles and the Behavior of Small Manufacturing Firms," NBER Working Papers 3892, National Bureau of Economic Research, Inc.
  2. Gerard Roland & Thierry Verdier, 1999. "Law Enforcement and Transition," William Davidson Institute Working Papers Series 262, William Davidson Institute at the University of Michigan.
  3. Bernanke, B. & Gertler, M. & Gilchrist, S., 1998. "The Financial Accelerator in a Quantitative Business Cycle Framework," Working Papers 98-03, C.V. Starr Center for Applied Economics, New York University.
  4. Viktor Kotlan & David Navratil, 2003. "Inflation Targeting as a Stabilisation Tool: Its Design and Performance in the Czech Republic," Macroeconomics 0310006, EconWPA.
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  7. Lubomír Lízal, 1999. "Depreciation rates in a transition economy: evidence from czech panel data," Prague Economic Papers, University of Economics, Prague, vol. 1999(3).
  8. 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.
  9. Charles T. Carlstrom & Timothy S. Fuerst, 1996. "Agency costs, net worth, and business fluctuations: a computable general equilibrium analysis," Working Paper 9602, Federal Reserve Bank of Cleveland.
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  11. Stephen D. Oliner & Glenn D. Rudebusch, 1994. "Is there a broad credit channel for monetary policy?," Working Paper Series / Economic Activity Section 146, Board of Governors of the Federal Reserve System (U.S.).
  12. Sylvia Kaufmann, 2001. "Is there an asymmetric effect on monetary policy over time? A bayesian analysis using austrian data," Working Papers 45, Oesterreichische Nationalbank (Austrian Central Bank).
  13. Jan Hanousek & Randall K. Filer, 2003. "Investment, Credit Rationing, and the Soft Budget Constraint: What Would a Well-Functioning Credit Market Look Like?," Microeconomics 0306003, EconWPA.
  14. Ball, L. & Mankiw, N.G., 1992. "Asymmetric Price Adjustment and Economic Fluctuations," Harvard Institute of Economic Research Working Papers 1602, Harvard - Institute of Economic Research.
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  17. Konings, Jozef & Rizov, Marian & Vandenbussche, Hylke, 2003. "Investment and financial constraints in transition economies: micro evidence from Poland, the Czech Republic, Bulgaria and Romania," Economics Letters, Elsevier, vol. 78(2), pages 253-258, February.
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