The impact of unconventional monetary policy on firm financing constraints: Evidence from the maturity extension program

The impact of unconventional monetary policy on firm financing constraints: Evidence from the maturity extension program

This paper investigates the impact of unconventional monetary policy on firm financial constraints using the maturity extension program (MEP). Consistent with bond market segmentation and limits to arbitrage, around the MEP's announcement, stock prices rose for those firms more dependent on lon...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
Veröffentlicht in:Journal of financial economics 2016-11, Vol.122 (2), p.409-429
Hauptverfasser: Foley-Fisher, Nathan, Ramcharan, Rodney, Yu, Edison
Format: Artikel
Sprache:eng
Schlagworte:
Arbitrage
Bond markets
Corporate debt
Firm-financial constraints
Maturity
Monetary policy
Risk premiums
Stock prices
Studies
Unconventional monetary policy
Online-Zugang:Volltext
Tags: Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
container_end_page 429
container_issue 2
container_start_page 409
container_title Journal of financial economics
container_volume 122
creator Foley-Fisher, Nathan
Ramcharan, Rodney
Yu, Edison
description This paper investigates the impact of unconventional monetary policy on firm financial constraints using the maturity extension program (MEP). Consistent with bond market segmentation and limits to arbitrage, around the MEP's announcement, stock prices rose for those firms more dependent on longer-term debt. These firms also issued more long-term debt during the MEP and expanded employment and investment. There is also evidence of “reach for yield” behavior, as the demand for riskier corporate debt also increased. Our results suggest that unconventional monetary policy might have relaxed financial constraints for some firms by inducing gap-filling behavior and affecting bond market risk premia.
doi_str_mv 10.1016/j.jfineco.2016.07.002
format Article
fullrecord <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_miscellaneous_1847487830</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><els_id>S0304405X16301234</els_id><sourcerecordid>1847487830</sourcerecordid><originalsourceid>FETCH-LOGICAL-c547t-564524686418f235b026cae5005b5799d8da70c58a116ec3d847452ca5d6cc023</originalsourceid><addsrcrecordid>eNqFkUFr3DAQhUVJoZu0P6EgyCUXuyPbsry9hBDSNhDoJYXehDIepzK2tJXkJfvvI2dzyiU6SAi-90Z6j7GvAkoBov02luNgHaEvq3wtQZUA1Qe2EZ3aFpVSzQnbQA1N0YD8-4mdxjhCXkpuN-zp_h9xO-8MJu4Hvjj0bk8uWe_MxGfvKJlw4Ds_WTxw7_hgw5w3Zxxa98gzHlMw1qX4nd_sbU8OiQ_Bzzxl59mkJdh04PSUyMXsynfBPwYzf2YfBzNF-vJ6nrE_P27ur38Vd79_3l5f3RUoG5UK2TayatqubUQ3VLV8gKpFQxJAPki13fZdbxSg7IwQLWHdd43KCjSybxGhqs_YxdE3z_2_UEx6thFpmowjv0QtVkGnuhoyev4GHf0Scg4rVdcgqraWmZJHCoOPMdCgd8HOOSQtQK996FG_9qHXPjQoDS8PuTzqKP92bynoiHZNq7eBMOne23ccngFhUJe6</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>1833012635</pqid></control><display><type>article</type><title>The impact of unconventional monetary policy on firm financing constraints: Evidence from the maturity extension program</title><source>Elsevier ScienceDirect Journals Complete</source><creator>Foley-Fisher, Nathan ; Ramcharan, Rodney ; Yu, Edison</creator><creatorcontrib>Foley-Fisher, Nathan ; Ramcharan, Rodney ; Yu, Edison</creatorcontrib><description>This paper investigates the impact of unconventional monetary policy on firm financial constraints using the maturity extension program (MEP). Consistent with bond market segmentation and limits to arbitrage, around the MEP's announcement, stock prices rose for those firms more dependent on longer-term debt. These firms also issued more long-term debt during the MEP and expanded employment and investment. There is also evidence of “reach for yield” behavior, as the demand for riskier corporate debt also increased. Our results suggest that unconventional monetary policy might have relaxed financial constraints for some firms by inducing gap-filling behavior and affecting bond market risk premia.</description><identifier>ISSN: 0304-405X</identifier><identifier>EISSN: 1879-2774</identifier><identifier>DOI: 10.1016/j.jfineco.2016.07.002</identifier><identifier>CODEN: JFECDT</identifier><language>eng</language><publisher>Amsterdam: Elsevier B.V</publisher><subject>Arbitrage ; Bond markets ; Corporate debt ; Firm-financial constraints ; Maturity ; Monetary policy ; Risk premiums ; Stock prices ; Studies ; Unconventional monetary policy</subject><ispartof>Journal of financial economics, 2016-11, Vol.122 (2), p.409-429</ispartof><rights>2016</rights><rights>Copyright Elsevier Sequoia S.A. Nov 2016</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c547t-564524686418f235b026cae5005b5799d8da70c58a116ec3d847452ca5d6cc023</citedby><cites>FETCH-LOGICAL-c547t-564524686418f235b026cae5005b5799d8da70c58a116ec3d847452ca5d6cc023</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://www.sciencedirect.com/science/article/pii/S0304405X16301234$$EHTML$$P50$$Gelsevier$$H</linktohtml><link.rule.ids>314,776,780,3537,27901,27902,65306</link.rule.ids></links><search><creatorcontrib>Foley-Fisher, Nathan</creatorcontrib><creatorcontrib>Ramcharan, Rodney</creatorcontrib><creatorcontrib>Yu, Edison</creatorcontrib><title>The impact of unconventional monetary policy on firm financing constraints: Evidence from the maturity extension program</title><title>Journal of financial economics</title><description>This paper investigates the impact of unconventional monetary policy on firm financial constraints using the maturity extension program (MEP). Consistent with bond market segmentation and limits to arbitrage, around the MEP's announcement, stock prices rose for those firms more dependent on longer-term debt. These firms also issued more long-term debt during the MEP and expanded employment and investment. There is also evidence of “reach for yield” behavior, as the demand for riskier corporate debt also increased. Our results suggest that unconventional monetary policy might have relaxed financial constraints for some firms by inducing gap-filling behavior and affecting bond market risk premia.</description><subject>Arbitrage</subject><subject>Bond markets</subject><subject>Corporate debt</subject><subject>Firm-financial constraints</subject><subject>Maturity</subject><subject>Monetary policy</subject><subject>Risk premiums</subject><subject>Stock prices</subject><subject>Studies</subject><subject>Unconventional monetary policy</subject><issn>0304-405X</issn><issn>1879-2774</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2016</creationdate><recordtype>article</recordtype><recordid>eNqFkUFr3DAQhUVJoZu0P6EgyCUXuyPbsry9hBDSNhDoJYXehDIepzK2tJXkJfvvI2dzyiU6SAi-90Z6j7GvAkoBov02luNgHaEvq3wtQZUA1Qe2EZ3aFpVSzQnbQA1N0YD8-4mdxjhCXkpuN-zp_h9xO-8MJu4Hvjj0bk8uWe_MxGfvKJlw4Ds_WTxw7_hgw5w3Zxxa98gzHlMw1qX4nd_sbU8OiQ_Bzzxl59mkJdh04PSUyMXsynfBPwYzf2YfBzNF-vJ6nrE_P27ur38Vd79_3l5f3RUoG5UK2TayatqubUQ3VLV8gKpFQxJAPki13fZdbxSg7IwQLWHdd43KCjSybxGhqs_YxdE3z_2_UEx6thFpmowjv0QtVkGnuhoyev4GHf0Scg4rVdcgqraWmZJHCoOPMdCgd8HOOSQtQK996FG_9qHXPjQoDS8PuTzqKP92bynoiHZNq7eBMOne23ccngFhUJe6</recordid><startdate>20161101</startdate><enddate>20161101</enddate><creator>Foley-Fisher, Nathan</creator><creator>Ramcharan, Rodney</creator><creator>Yu, Edison</creator><general>Elsevier B.V</general><general>Elsevier Sequoia S.A</general><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>20161101</creationdate><title>The impact of unconventional monetary policy on firm financing constraints: Evidence from the maturity extension program</title><author>Foley-Fisher, Nathan ; Ramcharan, Rodney ; Yu, Edison</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c547t-564524686418f235b026cae5005b5799d8da70c58a116ec3d847452ca5d6cc023</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2016</creationdate><topic>Arbitrage</topic><topic>Bond markets</topic><topic>Corporate debt</topic><topic>Firm-financial constraints</topic><topic>Maturity</topic><topic>Monetary policy</topic><topic>Risk premiums</topic><topic>Stock prices</topic><topic>Studies</topic><topic>Unconventional monetary policy</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Foley-Fisher, Nathan</creatorcontrib><creatorcontrib>Ramcharan, Rodney</creatorcontrib><creatorcontrib>Yu, Edison</creatorcontrib><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Journal of financial economics</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Foley-Fisher, Nathan</au><au>Ramcharan, Rodney</au><au>Yu, Edison</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>The impact of unconventional monetary policy on firm financing constraints: Evidence from the maturity extension program</atitle><jtitle>Journal of financial economics</jtitle><date>2016-11-01</date><risdate>2016</risdate><volume>122</volume><issue>2</issue><spage>409</spage><epage>429</epage><pages>409-429</pages><issn>0304-405X</issn><eissn>1879-2774</eissn><coden>JFECDT</coden><abstract>This paper investigates the impact of unconventional monetary policy on firm financial constraints using the maturity extension program (MEP). Consistent with bond market segmentation and limits to arbitrage, around the MEP's announcement, stock prices rose for those firms more dependent on longer-term debt. These firms also issued more long-term debt during the MEP and expanded employment and investment. There is also evidence of “reach for yield” behavior, as the demand for riskier corporate debt also increased. Our results suggest that unconventional monetary policy might have relaxed financial constraints for some firms by inducing gap-filling behavior and affecting bond market risk premia.</abstract><cop>Amsterdam</cop><pub>Elsevier B.V</pub><doi>10.1016/j.jfineco.2016.07.002</doi><tpages>21</tpages><oa>free_for_read</oa></addata></record>
fulltext fulltext
identifier ISSN: 0304-405X
ispartof Journal of financial economics, 2016-11, Vol.122 (2), p.409-429
issn 0304-405X
1879-2774
language eng
recordid cdi_proquest_miscellaneous_1847487830
source Elsevier ScienceDirect Journals Complete
subjects Arbitrage
Bond markets
Corporate debt
Firm-financial constraints
Maturity
Monetary policy
Risk premiums
Stock prices
Studies
Unconventional monetary policy
title The impact of unconventional monetary policy on firm financing constraints: Evidence from the maturity extension program
url https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-02-01T08%3A38%3A42IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=The%20impact%20of%20unconventional%20monetary%20policy%20on%20firm%20financing%20constraints:%20Evidence%20from%20the%20maturity%20extension%20program&rft.jtitle=Journal%20of%20financial%20economics&rft.au=Foley-Fisher,%20Nathan&rft.date=2016-11-01&rft.volume=122&rft.issue=2&rft.spage=409&rft.epage=429&rft.pages=409-429&rft.issn=0304-405X&rft.eissn=1879-2774&rft.coden=JFECDT&rft_id=info:doi/10.1016/j.jfineco.2016.07.002&rft_dat=%3Cproquest_cross%3E1847487830%3C/proquest_cross%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=1833012635&rft_id=info:pmid/&rft_els_id=S0304405X16301234&rfr_iscdi=true