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The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity
SAGE Open, Volume: 11, Issue: 1, Start page: 215824402098868
Swansea University Author: Abedin Abedin
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DOI (Published version): 10.1177/2158244020988683
Abstract
This article assesses the differential reactions of firms’ investment to monetary policy shocks based on various financial heterogeneity measures, such as leverage and cash holdings. It applies U.S. public firms’ panel data from the sample period 1990Q1 to 2007Q4 and high-frequency event-study appro...
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ISSN: | 2158-2440 2158-2440 |
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v2 64274 2023-08-31 The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity 4ed8c020eae0c9bec4f5d9495d86d415 Abedin Abedin Abedin Abedin true false 2023-08-31 BAF This article assesses the differential reactions of firms’ investment to monetary policy shocks based on various financial heterogeneity measures, such as leverage and cash holdings. It applies U.S. public firms’ panel data from the sample period 1990Q1 to 2007Q4 and high-frequency event-study approach. Low-leverage and high cash holding firms react more to monetary policy shocks explaining the different investment activities. For the high-leverage and low cash holding firms, the two monetary policy shock variable interactions are statistically insignificant. However, they are statistically significant for the low-leverage and high cash holding firms. During a contractionary monetary policy period, higher cash holding firms improve investment efficiency. This article strengthens the literature of corporate investment behavior which can assist advance and optimize macrocontrol policies. Journal Article SAGE Open 11 1 215824402098868 SAGE Publications 2158-2440 2158-2440 Monetary policy shocks, corporate investment, financial heterogeneity, cash holding 0 0 0 0001-01-01 10.1177/2158244020988683 http://dx.doi.org/10.1177/2158244020988683 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University The author(s) received no financial support for the research, authorship, and/or publication of this article. 2023-09-19T16:09:36.8502451 2023-08-31T19:08:29.3453020 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Mahbuba Aktar 1 Abedin Abedin 2 Anupam Das Gupta 3 64274__28557__bf1b3033aaa14db18a3fe6358f5a65e8.pdf 64274.VOR.pdf 2023-09-18T14:13:02.2154691 Output 608631 application/pdf Version of Record true © The Author(s) 2021. Distributed under the terms of a Creative Commons Attribution 4.0 License (CC BY 4.0). true eng https://creativecommons.org/licenses/by/4.0/ |
title |
The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity |
spellingShingle |
The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity Abedin Abedin |
title_short |
The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity |
title_full |
The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity |
title_fullStr |
The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity |
title_full_unstemmed |
The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity |
title_sort |
The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity |
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4ed8c020eae0c9bec4f5d9495d86d415 |
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4ed8c020eae0c9bec4f5d9495d86d415_***_Abedin Abedin |
author |
Abedin Abedin |
author2 |
Mahbuba Aktar Abedin Abedin Anupam Das Gupta |
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SAGE Open |
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11 |
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215824402098868 |
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Swansea University |
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2158-2440 2158-2440 |
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10.1177/2158244020988683 |
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SAGE Publications |
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Faculty of Humanities and Social Sciences |
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School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance |
url |
http://dx.doi.org/10.1177/2158244020988683 |
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description |
This article assesses the differential reactions of firms’ investment to monetary policy shocks based on various financial heterogeneity measures, such as leverage and cash holdings. It applies U.S. public firms’ panel data from the sample period 1990Q1 to 2007Q4 and high-frequency event-study approach. Low-leverage and high cash holding firms react more to monetary policy shocks explaining the different investment activities. For the high-leverage and low cash holding firms, the two monetary policy shock variable interactions are statistically insignificant. However, they are statistically significant for the low-leverage and high cash holding firms. During a contractionary monetary policy period, higher cash holding firms improve investment efficiency. This article strengthens the literature of corporate investment behavior which can assist advance and optimize macrocontrol policies. |
published_date |
0001-01-01T16:09:39Z |
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11.012678 |