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Sectoral Effects of Monetary Policy: The Evidence from Publicly Traded Firms
Author(s) -
Jansen Dennis W.,
Kishan Ruby P.,
Vacaflores Diego E.
Publication year - 2013
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.4284/0038-4038-2011.040
Subject(s) - leverage (statistics) , monetary economics , monetary policy , credit channel , balance sheet , debt , business , working capital , economics , channel (broadcasting) , capital (architecture) , finance , inflation targeting , archaeology , machine learning , computer science , history , electrical engineering , engineering
This article examines the impact of monetary policy on net sales of publicly traded firms in various sectors of the U.S. economy. We find that monetary policy has a heterogeneous effect on firms in different industries, with the strongest effect on firms in Retail and Wholesaling. Balance sheet characteristics, especially size, influence the impact of policy. Larger firms in several industries are able to mitigate the effect of policy. We find mixed results for firms' working capital, short‐term debt ratio, and leverage ratio with respect to the operation of the credit channel of monetary transmission mechanism.