Monetary Policy in an Open Economy: The Differential Impact on Exporting and Non-Exporting Firms

48 Pages Posted: 25 Feb 2002

See all articles by Hedva Ber

Hedva Ber

Bank of Israel - Research Department

Asher Blass

Bank of Israel - Research Department

Oved Yosha

Tel Aviv University - The Eitan Berglas School of Economics (Deceased)

Date Written: February 2002

Abstract

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.

Keywords: Interest rate, investment, corporate finance, leverage, liquidity, Tobin's q, publicly traded firms

JEL Classification: D20, E44

Suggested Citation

Ber, Hedva and Blass, Asher and Yosha, Oved, Monetary Policy in an Open Economy: The Differential Impact on Exporting and Non-Exporting Firms (February 2002). CEPR Discussion Paper No. 3191. Available at SSRN: https://ssrn.com/abstract=301871

Hedva Ber (Contact Author)

Bank of Israel - Research Department ( email )

PO Box 780
Jerusalem 91007
Israel
+97 2 6552 608 (Phone)
+97 22 6552 660 (Fax)

Asher Blass

Bank of Israel - Research Department ( email )

PO Box 780
Jerusalem 91007
Israel
+97 2 6552 600 (Phone)
+97 22 6552 660 (Fax)

Oved Yosha

Tel Aviv University - The Eitan Berglas School of Economics (Deceased)

N/A

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