Publication detail

Financial Accelerator Effects in the Balance Sheets of Czech Firms

Author(s): prof. Roman Horváth Ph.D.,
Type: Others
Year: 2006
Number: 0
ISSN / ISBN:
Published in: William Davidson Institute Working Papers, No. 847, (also in IES FSV UK working papers, No. 96/2005)
Publishing place: University of Michigan
Keywords: balance sheet channel, financial accelerator, interest rates, monetary policy transmission
JEL codes: G11, G32
Suggested Citation: Horvath, Roman. 2006. Financial Accelerator Effects in the Balance Sheets of Czech Firms, William Davidson Institute Working Papers, No. 847
Grants: IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: The paper examines a financial accelerator mechanism in analyzing determinants of corporate interest rates. Using a panel of the financial statements of 448 Czech firms from 1996–2002, we find that balance sheet indicators matter for the interest rates paid by firms. Market access is particularly important in this regard. The strength of corporate balance sheets seem to vary with firm size. There is also evidence that monetary policy has a stronger effect on smaller than on larger firms. On the other hand, we find no asymmetry in the monetary policy effects over the business cycle.

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