The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms

The aim of this paper is to examine whether the policy of low interest rates and exchange rate commitment of the Czech National Bank affected the competitiveness of non-financial firms in the Czech Republic in the sectors of agriculture, construction and manufacturing. Panel techniques are employ...

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Main Authors: Veronika Kajurova, Dagmar Linnertova
Format: Article
Language:English
Published: University of Finance and Administration 2018-03-01
Series:ACTA VŠFS
Subjects:
Online Access:https://www.vsfs.cz/periodika/acta-2018-1-02.pdf
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author Veronika Kajurova
Dagmar Linnertova
author_facet Veronika Kajurova
Dagmar Linnertova
author_sort Veronika Kajurova
collection DOAJ
description The aim of this paper is to examine whether the policy of low interest rates and exchange rate commitment of the Czech National Bank affected the competitiveness of non-financial firms in the Czech Republic in the sectors of agriculture, construction and manufacturing. Panel techniques are employed to investigate the impact of monetary policy on selected indicators of firms’ competitiveness, measured by financial performance in this study. Size and sectoral characteristics are reflected when analysing the impact of monetary policy. The empirical evidence is based on firm-level data from the Amadeus database for the period between 2006 and 2015. Evaluating monetary policy effects on the whole sample, our empirical evidence suggested that the competitiveness of Czech firms measured by indicators of financial performance increases. The results vary among profitability ratios, but the highest influence was investigated for the ROE ratio. We found that monetary policy affected firm-specific characteristics, and firm-specific variables in interaction with monetary policy affected competitiveness of firms. FX interventions were also a significant factor in competitiveness in all cases.
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spelling doaj.art-8e0809ae73394fedaf69aa844934da612022-12-21T17:31:25ZengUniversity of Finance and AdministrationACTA VŠFS1802-792X1802-79462018-03-011214373The Impact of Loose Monetary Policy on the Competitiveness of Czech FirmsVeronika Kajurova0Dagmar Linnertova1Mendel University in Brno, Faculty of Business and EconomicsMasaryk University, Faculty of Economics and AdministrationThe aim of this paper is to examine whether the policy of low interest rates and exchange rate commitment of the Czech National Bank affected the competitiveness of non-financial firms in the Czech Republic in the sectors of agriculture, construction and manufacturing. Panel techniques are employed to investigate the impact of monetary policy on selected indicators of firms’ competitiveness, measured by financial performance in this study. Size and sectoral characteristics are reflected when analysing the impact of monetary policy. The empirical evidence is based on firm-level data from the Amadeus database for the period between 2006 and 2015. Evaluating monetary policy effects on the whole sample, our empirical evidence suggested that the competitiveness of Czech firms measured by indicators of financial performance increases. The results vary among profitability ratios, but the highest influence was investigated for the ROE ratio. We found that monetary policy affected firm-specific characteristics, and firm-specific variables in interaction with monetary policy affected competitiveness of firms. FX interventions were also a significant factor in competitiveness in all cases.https://www.vsfs.cz/periodika/acta-2018-1-02.pdfcompetitivenessfnancial performanceforeign exchange rate interventionslow interest ratesmonetary policy
spellingShingle Veronika Kajurova
Dagmar Linnertova
The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms
ACTA VŠFS
competitiveness
fnancial performance
foreign exchange rate interventions
low interest rates
monetary policy
title The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms
title_full The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms
title_fullStr The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms
title_full_unstemmed The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms
title_short The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms
title_sort impact of loose monetary policy on the competitiveness of czech firms
topic competitiveness
fnancial performance
foreign exchange rate interventions
low interest rates
monetary policy
url https://www.vsfs.cz/periodika/acta-2018-1-02.pdf
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