IMF Working Papers

Firm-Level Data and Monetary Policy: The Case of a Middle Income Country

By Lahcen Bounader, Mohamed Doukali

November 1, 2019

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Lahcen Bounader, and Mohamed Doukali. Firm-Level Data and Monetary Policy: The Case of a Middle Income Country, (USA: International Monetary Fund, 2019) accessed November 23, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We test the existence of the balance sheet channel of monetary policy in a middle-income country. Firm-level data scarcity and quality, in such a context, make the identification of this channel a steep challenge. To circumvent this challenge, we use panel instrumental variables estimation with measurement error to analyze the financial statements of 58 500 Moroccan firms over the period 2010-2016. Our analysis confirms the existence of this channel. It shows that monetary policy has a significant impact on small and medium enterprises’ access to banks’ financing, and that firm-specific variables are key determinants of firms’ financing decisions.

Subject: Banking, Collateral, Econometric analysis, Estimation techniques, External debt, Financial institutions, Financial statements, Loans, Public financial management (PFM), Trade credits

Keywords: Balance sheet response, Collateral, Data scarcity, Debt variable, Estimation techniques, Financial statements, Financing decision, Firm, Loans, Long-term debt, Maghreb, Reputation build-up, Short-term debt, Southern Europe, Trade credits, WP

Publication Details

  • Pages:

    34

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2019/239

  • Stock No:

    WPIEA2019239

  • ISBN:

    9781513518862

  • ISSN:

    1018-5941

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