Saturday , January 29 2022
Home / Amol Agrawal: Mostly Economics / Quantitative easing and corporate innovation

Quantitative easing and corporate innovation

Summary:
Niklas Grimm, Luc Laeven, Alexander Popov in this ECB paper estimate linkages between QE and corporate innovation: To what extent can Quantitative Easing impact productivity growth? We document a strong and heterogeneous response of corporate R&D investment to changes in debt financing conditions induced by corporate debt purchases under the ECB’s Corporate Sector Purchase Program. Companies eligible for the program increase significantly their investment in R&D, relative to similar ineligible companies operating in the same country and sector. The evidence further suggests that by subsidizing the cost of debt, corporate bond purchases by the central bank stimulate innovation through a wealth transfer to innovative companies with low debt levels, rather than by supporting credit

Topics:
Amol Agrawal considers the following as important: , , ,

This could be interesting, too:

Amol Agrawal writes Reports from China: Joan Robinson as Observer and Travel Writer, 1953-78

Amol Agrawal writes MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA’s Macroeconometric Model

Amol Agrawal writes Bank of England to release a pop-economics book to increase public understanding about the economy and the Bank’s role

Amol Agrawal writes The Impact of COVID-19 Pandemic on Consumer Confidence in India

Niklas Grimm, Luc Laeven, Alexander Popov in this ECB paper estimate linkages between QE and corporate innovation:

To what extent can Quantitative Easing impact productivity growth? We document a strong and heterogeneous response of corporate R&D investment to changes in debt financing conditions induced by corporate debt purchases under the ECB’s Corporate Sector Purchase Program. Companies eligible for the program increase significantly their investment in R&D, relative to similar ineligible companies operating in the same country and sector.

The evidence further suggests that by subsidizing the cost of debt, corporate bond purchases by the central bank stimulate innovation through a wealth transfer to innovative companies with low debt levels, rather than by supporting credit constrained firms

Amol Agrawal
I am currently pursuing my PhD in economics. I have work-ex of nearly 10 years with most of those years spent figuring economic research in Mumbai’s financial sector.

Leave a Reply

Your email address will not be published. Required fields are marked *