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

35 Pages Posted: 23 Jan 2020

See all articles by Lahcen Bounader

Lahcen Bounader

International Monetary Fund (IMF)

Mohamed Doukali

Bank Al Maghrib

Multiple version iconThere are 2 versions of this paper

Date Written: November 2019


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.

Keywords: Real sector, Monetary transmission mechanism, Financial markets, Interest rate policy, Exchange rate policy, Corporate balance sheets, monetary policy transmission, external finance, panel data, measurement error., WP, SMEs, firm-specific, measurement error, microdata, trade credit

JEL Classification: E44, E52, E58, G21, G32, C51, C55, E01, O24, G2

Suggested Citation

Bounader, Lahcen and Doukali, Mohamed, Firm-Level Data and Monetary Policy: The Case of a Middle Income Country (November 2019). IMF Working Paper No. 19/239, Available at SSRN:

Lahcen Bounader (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mohamed Doukali

Bank Al Maghrib ( email )


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