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Pushing on a String: State-Owned Enterprises and Monetary Policy Transmission in China
This paper studies whether monetary transmission in China is asymmetric. While researchers found an asymmetric transmission in the U.S. and other economies, China offers a specific rationale for asymmetries: the presence of state-owned enterprises (SOEs) enjoying preferential access to financing...
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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 06-2018) |
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| Main Authors: | , , |
| Format: | Article |
| Language: | English |
| Published: |
2017
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| Subjects: | |
| Online Access: | PDF Full Text |
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| Summary: | This paper studies whether monetary transmission in China is
asymmetric. While researchers found an asymmetric transmission in the
U.S. and other economies, China offers a specific rationale for asymmetries:
the presence of state-owned enterprises (SOEs) enjoying preferential
access to financing. To study the consequences of SOEs for policy
transmission, we differentiate between expansionary and restrictive
policy shocks and argue that SOEs should suffer less from a policy tightening
and benefit more from a policy easing. Based on sector-specific
macroeconomic time series and a large firm-level data set, we provide
evidence of a systematic and sizable asymmetry in the transmission of
monetary policy shocks in China. The nature of the asymmetry is consistent
with the notion of explicit or implicit government-guarantees of
SOEs and has consequences for the adjustment of aggregate variables. In
contrast to other central banks, the People’s Bank of China seems to be
able to “push on a string”. |
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| Physical Description: | 38 Pages |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0559 |