Investment, the Cost of Capital, and Monetary Policy in the Nineties in France: A Panel Data Investigation

By Jean-Bernard Chatelain, André Tiomo. Social Science Research Network, 2002

155 citations recorded by the source corpus.

Using a large panel of about 6,946 French manufacturing firms, this paper investigates the effect of monetary policy from 1990 to 1999 on investment through the cost of capital and the cash-flow channels. We compare several specifications of the neo-classical demand for capital, taking into account transitory dynamics. The user cost of capital has a significant negative elasticity with respect to capital using the traditional within estimates, or as long as cash-flow are not added in the regression when using Generalized Method of Moments estimates. Asymmetries of effect of monetary policy are evaluated on different groups of firms which differ with respect to informational asymmetries.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/432bd4cd0e2c8324792b4b3b140e0285ac6a5d51

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Citations in the corpus

The Interest Rate and Credit Channels in Belgium: An Investigation with Micro-Level Firm Data (2001, unknown): “For France, Chatelain and Tiomo (2001) obtain evidence that equipment goods firms, firms with a low trade credit share and risky firms are more sensitive to cash flow than other firms.”
New Findings on Firm Investment and Monetary Transmission in the Euro Area (2001, background): “ Chatelain and Tiomo (2001) suggest a reason for the loss in significance of long-run”