Financing decisions of firms and central bank policy

Government intervention and firm investment: Evidence from international micro-data

“…Previous studies on the role of government in influencing firm investments have focused on the effects of monetary policies via changes in interest rates and money supply (e.g. Kormendi and Meguire, 1985;Gavin, 1992;Goh and Oliver, 2004). Nevertheless, the effectiveness of monetary policies has been seriously constrained in many countries due to their prevailing low interest rates.…”