Interest rate, firm investment and debt: Empirical analysis for Taiwan's public-listed Electronic firms
| Autor: | CHIEN-LUNG LI, 李建龍 |
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| Rok vydání: | 2007 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 95 The purpose of this paper is to shed light on the relationship between interest rate, investment and debt. The data are derived from the Taiwan Economic Journal (TEJ) database from 1990 Ⅲ to 2006 Ⅱ, including 269 publicly-trade companies in Taiwan Electronic industry. We divide firm investments and debt into long-run and short-run variables. Monetary policy may affect firm’s investments and debt through the change of interest rate by bank channel. We use interbank call loan rate and the discount rate as monetary policy tools, and divide firms into large firms and small firms by employees. The empirical results show that the interbank call loan rate and the discount rate make the short-run investment and debt slow-down tendency but they don’t have obviously effect on the long-run investment and debt. In this paper, our conclusions show monetary policy has significant effect to short-run investment and debt. According to the study of Friedman and Schwartz (1963), monetary brings substantial influence on real economic activity. Many researchers(Romer and Romer (1989)；Bernanke and Blinder (1992)) argue that the influence of monetary policy persisted for 2 years. The major points that emerge from this paper are different monetary policy tool will make different effect on firm investment and debt. In other words, the interbank call loan rate has greater effect than discount rate. In contrast, the long-run effect of interest rate movement is more ambiguous. Central Bank may have many economic goals in the long-run and there is limited support for the pattern of long-run relation between interest rate, investment and debt. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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