Monetary Policy and Intangible Investment

68 Pages Posted: 9 Jun 2020 Last revised: 19 Oct 2021

See all articles by Robin Döttling

Robin Döttling

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)

Lev Ratnovski

International Monetary Fund; European Central Bank, Financial Research Division

Multiple version iconThere are 2 versions of this paper

Date Written: August 11, 2021

Abstract

We document that the stock prices and investment of firms with more intangible assets respond less to monetary policy. Similarly, intangible investment responds less to monetary policy compared to tangible investment. These effects are most pronounced among financially constrained firms, indicating that corporate intangible capital weakens the credit channel of monetary policy transmission. The evidence that higher depreciation rates or higher adjustment costs of intangible assets explain these effects is mixed, suggesting a smaller role for these channels.

Keywords: Intangible Investment, Monetary Policy, Credit Channel, Stock Returns, Heterogeneity

JEL Classification: E22, E52, G31, G32

Suggested Citation

Döttling, Robin and Ratnovski, Lev and Ratnovski, Lev, Monetary Policy and Intangible Investment (August 11, 2021). Available at SSRN: https://ssrn.com/abstract=3612304 or http://dx.doi.org/10.2139/ssrn.3612304

Robin Döttling (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T08-46
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Lev Ratnovski

International Monetary Fund ( email )

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

HOME PAGE: http://ratnovski.googlepages.com

European Central Bank, Financial Research Division

Germany

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