Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297812.2 
Year of Publication: 
2025
Series/Report no.: 
FERDI Working Paper No. P338
Version Description: 
Revised version March 2025
Publisher: 
Fondation pour les études et recherches sur le développement international (FERDI), Clermont-Ferrand
Abstract: 
This paper examines how firms in developing countries respond to changes in monetary policy. Using data from the World Bank Enterprise Surveys and a newly constructed database of policy changes, the study finds that firms perceive credit access as more restrictive immediately following a monetary tightening. Monetary policy also affects managers' decisions to apply for loans. The research identifies significant variations in firms' reactions based on their proximity to banks. Additionally, monetary policy transmission is higher in less liquid banking systems and when monetary policy is more credible.
Subjects: 
Monetary policy
financial constraints
firms
developing countries
JEL: 
D4
E52
E52
G32
L1
O16
Document Type: 
Working Paper

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2 10419/297812.2 Revised Version: March 2025
1 10419/297812 First Version: December 2023

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