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The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity

Mahbuba Aktar, Mohammad Abedin Orcid Logo, Anupam Das Gupta

Sage Open, Volume: 11, Issue: 1, Start page: 215824402098868

Swansea University Author: Mohammad Abedin Orcid Logo

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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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Published in: Sage Open
ISSN: 2158-2440 2158-2440
Published: SAGE Publications 2021
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URI: https://cronfa.swan.ac.uk/Record/cronfa64274
first_indexed 2023-09-18T13:14:03Z
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spelling 2024-10-09T12:11:25.6217512 v2 64274 2023-08-31 The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity 4ed8c020eae0c9bec4f5d9495d86d415 0000-0002-4688-0619 Mohammad Abedin Mohammad Abedin true false 2023-08-31 CBAE 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 1 3 2021 2021-03-01 10.1177/2158244020988683 http://dx.doi.org/10.1177/2158244020988683 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University Other The author(s) received no financial support for the research, authorship, and/or publication of this article. 2024-10-09T12:11:25.6217512 2023-08-31T19:08:29.3453020 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Mahbuba Aktar 1 Mohammad Abedin 0000-0002-4688-0619 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
Mohammad 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
author_id_str_mv 4ed8c020eae0c9bec4f5d9495d86d415
author_id_fullname_str_mv 4ed8c020eae0c9bec4f5d9495d86d415_***_Mohammad Abedin
author Mohammad Abedin
author2 Mahbuba Aktar
Mohammad Abedin
Anupam Das Gupta
format Journal article
container_title Sage Open
container_volume 11
container_issue 1
container_start_page 215824402098868
publishDate 2021
institution Swansea University
issn 2158-2440
2158-2440
doi_str_mv 10.1177/2158244020988683
publisher SAGE Publications
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str 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
document_store_str 1
active_str 0
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 2021-03-01T14:28:13Z
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score 11.048149

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