Bond Market Stimulus: Firm-Level Evidence

65 Pages Posted: 8 Oct 2020 Last revised: 3 Nov 2022

See all articles by Olivier Darmouni

Olivier Darmouni

Columbia University - Columbia Business School

Kerry Siani

MIT Sloan Finance Group

Multiple version iconThere are 2 versions of this paper

Date Written: January 31, 2022

Abstract

Using micro-data on corporate balance sheets, we study firm behavior after the unprecedented policy support to corporate bond markets in 2020. As bond yields fell, firms issued bonds to accumulate large and persistent amounts of liquid assets. The effects on real investment was generally weak: many issuers already had access to bank liquidity and maintained equity payouts, while others used bond funds to pay back bank debt. This evidence sheds light on how corporate liquidity and financial heterogeneity matter for the macro-economy and the transmission of unconventional policy.

Keywords: Corporate bonds, unconventional monetary policy, corporate liquidity

JEL Classification: G23, E44, G32, E52

Suggested Citation

Darmouni, Olivier and Siani, Kerry, Bond Market Stimulus: Firm-Level Evidence (January 31, 2022). Available at SSRN: https://ssrn.com/abstract=3693282 or http://dx.doi.org/10.2139/ssrn.3693282

Olivier Darmouni (Contact Author)

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Kerry Siani

MIT Sloan Finance Group ( email )

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