The Micro Impact of Macroprudential Policies: Firm-Level Evidence
66 Pages Posted: 14 Jan 2019
Date Written: December 2018
Combining balance sheet data on 900,000 firms from 48 countries with information on the adoption of macroprudential policies during 2003-2011, we find that these policies are associated with lower credit growth. These effects are especially significant for micro, small and medium enterprises (MSMEs) and young firms that, according to the literature, are more financially constrained and bank dependent. Among MSMEs and young firms, those with weaker balance sheets exhibit lower credit growth in conjunction with the adoption of macroprudential policies, suggesting that these policies can enhance financial stability. Finally, our results show that macroprudential policies have real effects, as they are associated with lower investment and sales growth.
Keywords: Macroprudential policies and financial stability, Central banks and their policies, Balance sheets, Public enterprises, financial development; macroprudential policies; firm financing, financial development, macroprudential policies, firm financing, Financial Markets and the Macroeconomy, Government Policy and Regulation
JEL Classification: E44, E58, G18, G28
Suggested Citation: Suggested Citation