G3 - Corporate Finance and Governance

• Financial Constraints and Corporate Investment in China

  Staff Discussion Paper 2022-22 Kun Mo, Michel Soudan

  Financial constraints deter firms from pursuing optimal investment plans. In China, we find privately owned firms face greater financial constraints than state-owned enterprises (SOEs). This can be explained by our finding that lenders appear less concerned about the credit risk of SOEs, which causes distortions in the allocation of credit.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Financial markets, Firm dynamics JEL Code(s): E, E2, E22, G, G1, G3

• Monetary Policy, Credit Constraints and SME Employment

  Staff Working Paper 2022-49 Julien Champagne, Émilien Gouin-Bonenfant

  We revisit an old question: how do financial constraints affect the transmission of monetary policy to the real economy? To answer this question, we propose a simple empirical strategy that combines firm-level employment and balance sheet data, identified monetary policy shocks and survey data on financing activities.

  Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Econometric and statistical methods, Firm dynamics, Labour markets, Monetary policy JEL Code(s): E, E2, E3, E4, E43, E5, E52, G, G3