DP3191 Monetary Policy in an Open Economy: The Differential Impact on Exporting and Non-Exporting Firms
|Author(s):||Hedva Ber, Asher Blass, Oved Yosha|
|Publication Date:||February 2002|
|Keyword(s):||corporate finance, interest rate, investment, leverage, liquidity, publicly traded firms, Tobin's q|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=3191|
Using firm-level data, we provide evidence that, although monetary policy affects real investment, the effect operates differentially: the greater its export intensity the less a firm is affected by tight money. We examine several interpretations and conclude that the impact is transmitted primarily through the supply side due to differential access to credit markets. This finding lends support to the commonplace view that monetary policy is less effective the more open the economy.