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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. Stephen D. Oliner & Glenn D. Rudebusch, 1996. "Is there a broad credit channel for monetary policy?," Economic Review, Federal Reserve Bank of San Francisco, pages 3-13.
  2. Laurence Ball & N. Gregory Mankiw, 1992. "Asymmetric Price Adjustment and Economic Fluctuations," NBER Working Papers 4089, National Bureau of Economic Research, Inc.
  3. 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).
  4. Gerard Roland & Thierry Verdier, 1999. "Law Enforcement and Transition," William Davidson Institute Working Papers Series 262, William Davidson Institute at the University of Michigan.
  5. 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.
  6. Lubomír Lízal & Jan Svejnar, 2002. "Investment, Credit Rationing, And The Soft Budget Constraint: Evidence From Czech Panel Data," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 353-370, May.
  7. Andrew Benito & John Whitley, 2003. "Implicit interest rates and corporate balance sheets: an analysis using aggregate and disaggregated UK data," Bank of England working papers 193, Bank of England.
  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. Mojon, Benoit & Smets, Frank & Vermeulen, Philip, 2002. "Investment and monetary policy in the euro area," Journal of Banking & Finance, Elsevier, vol. 26(11), pages 2111-2129, November.
  10. MOONS, Cindy & VAN POECK, André, 2005. "Does one size fit all? A Taylor-rule based analysis of monetary policy for current and future EMU members," Working Papers 2005026, University of Antwerp, Faculty of Applied Economics.
  11. Mark Gertler & Simon Gilchrist, 1993. "Monetary policy, business cycles and the behavior of small manufacturing firms," Finance and Economics Discussion Series 93-4, Board of Governors of the Federal Reserve System (U.S.).
  12. Peersman, Gert & Smets, Frank, 2002. "The industry effects of monetary policy in the euro area," Working Paper Series 0165, European Central Bank.
  13. 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.
  14. Viktor Kotlán & David Navrátil, 2003. "Inflation Targeting as a Stabilization Tool: Its Design and Performance in the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 53(5-6), pages 220-242, May.
  15. Fidrmuc, Jarko & Korhonen, Iikka, 2006. "Meta-analysis of the business cycle correlation between the euro area and the CEECs," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 518-537, September.
  16. Boissay, Frédéric, 2001. "Credit rationing, output gap, and business cycles," Working Paper Series 0087, European Central Bank.
  17. Kashyap, Anil K & Lamont, Owen A & Stein, Jeremy C, 1994. "Credit Conditions and the Cyclical Behavior of Inventories," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 565-92, August.
  18. Elbourne, Adam & de Haan, Jakob, 2006. "Financial structure and monetary policy transmission in transition countries," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 1-23, March.
  19. Lubomír Lízal, 1999. "Depreciation rates in a transition economy: evidence from czech panel data," Prague Economic Papers, University of Economics, Prague, vol. 1999(3).
  20. Hanousek, Jan & Filer, Randall K., 2004. "Investment, credit rationing, and the soft budget constraint: what would a well-functioning credit market look like?," Economics Letters, Elsevier, vol. 82(3), pages 385-390, March.
  21. Carlstrom, Charles T & Fuerst, Timothy S, 1997. "Agency Costs, Net Worth, and Business Fluctuations: A Computable General Equilibrium Analysis," American Economic Review, American Economic Association, vol. 87(5), pages 893-910, December.
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  23. repec:cup:cbooks:9780521022460 is not listed on IDEAS
  24. Bernanke, Ben & Gertler, Mark, 1989. "Agency Costs, Net Worth, and Business Fluctuations," American Economic Review, American Economic Association, vol. 79(1), pages 14-31, March.
  25. Anca Pruteanu, 2004. "The Role of Banks in the Czech Monetary Policy Transmission Mechanism," Working Papers 2004/03, Czech National Bank, Research Department.
  26. Spiros Bougheas & Paul Mizen & Cihan Yalcin, 2004. "Access to External Finance : Theory and Evidence on the Impact of Firm-Specific Characteristics," Working Papers 0406, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  27. Anca Pruteanu, 2004. "Was There Evidence of Credit Rationing in the Czech Republic?," Eastern European Economics, M.E. Sharpe, Inc., vol. 42(5), pages 58-72, September.
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