Subject. The article addresses the transmission mechanisms of the U.S. monetary policy. Objectives. Our aim is to evaluate the transmission mechanisms of the U.S. monetary policy. Methods. The paper analyzes how the investment activities of 3,983 companies of the eight non-financial industries (mining, construction, manufacturing, transportation, information sector, trade, and agriculture) of 23 emerging economies respond to the monetary policy decisions for 2010–2017. Results. Investment activities of companies are influenced by monetary policy decisions through the transmission mechanism of financial markets. We found that American companies are more exposed to the monetary policy decisions than other emerging market companies, while Asian companies are indifferent to them. We confirm that capital-intensive and large companies, as well as debt-laden companies are more sensitive to monetary policy decisions. We also confirm that companies at different stages of their development react differently to the said decisions. The article can be valuable for the scientific community as part of the study of issues related to emerging market and monetary policy implications, for representatives of investment community, considering the potential investments in the assets of emerging countries, and for monetary authorities, responsible for the consistent monetary policy and its effects on the real economy, while constructing better models of monetary policy transmission. Conclusions. We show that companies of EMEA, Asia and America macro-regions and firms from different industries react differently to the monetary policy changes.
Bernanke B.S., Gertler M. Inside the Black Box: The Credit Channel of Monetary Policy Transmission. Journal of Economic Perspectives, 1995, vol. 9, no. 4, pp. 27–48. URL: Link
Ankudinov A.B., Dashkin R.M. Determinants of Emerging Markets Companies Investment Behavior. International Journal of Engineering Research and Technology, 2020, vol. 13, no. 12, pp. 4480–4493. URL: Link
Cloyne J., Ferreira C., Froemel M., Surico P. Monetary Policy, Corporate Finance and Investment. NBER Working Papers, 2018, no. 25366. URL: Link
Jeenas P. Firm Balance Sheet Liquidity, Monetary Policy Shocks, and Investment Dynamics. Job Market Paper, 2018. URL: Link
Bahaj S., Foulis A., Pinter G., Surico P. Employment and the Collateral Channel of Monetary Policy. Bank of England Working Papers, 2019, no. 827. URL: Link
Bernanke B., Gertler M. Agency Costs, Net Worth, and Business Fluctuations. The American Economic Review, 1989, vol. 79, no. 1, pp. 14–31. URL: Link
Bernanke B.S., Gertler M., Gilchrist S. The financial accelerator in a quantitative business cycle framework. Handbook of Macroeconomics, 1999, vol. 1, part C, pp. 1341–1393. URL: Link10034-X
Bean C., Larsen J., Nikolov K. Financial frictions and the monetary transmission mechanism: Theory, evidence and policy implications. ECB Working Paper, 2002, no. 113. URL: Link
Gertler M., Gilchrist S. Monetary Policy, Business Cycles, and the Behavior of Small Manufacturing Firms. The Quarterly Journal of Economics, 1994, vol. 109, iss. 2, pp. 309–340. URL: Link
Ganley J., Salmon C. The Industrial Impact of Monetary Policy Shocks: Some Stylised Facts. Bank of England Working Paper, 1996, no. 68. URL: Link
Barth M.J., Ramey V.A. The Cost Channel of Monetary Transmission. NBER Macroeconomics Annual, 2001, vol. 16, pp. 199–256. URL: Link
Dedola L., Lippi F. The monetary transmission mechanism: Evidence from the industries of five OECD countries. European Economic Review, 2005, vol. 49, iss. 6, pp. 1543–1569. URL: Link
Peersman G., Smets F. The Industry Effects of Monetary Policy in the Euro Area. Economic Journal, 2005, vol. 115, no. 503, pp. 319–342. URL: Link
Fratto C., Vannier B.H., Mircheva B. et al. Unconventional Monetary Policies in Emerging Markets and Frontier Countries. IMF Working Paper, 2021, no. WP/21/14. URL: Link
Bräuning F., Ivashina V. U.S. Monetary Policy and Emerging Market Credit Cycles. Journal of Monetary Economics, 2020, vol. 112, pp. 57–76. URL: Link
Forbes K.J., Warnock F.E. Capital Flow Waves: Surges, Stops, Flight, and Retrenchment. Journal of International Economics, 2012, vol. 88, iss. 2, pp. 235–251. URL: Link
Fratzscher M. Capital Flows: Push versus Pull Factors and the Global Financial Crisis. Journal of International Economics, 2012, vol. 88, iss. 2, pp. 341–356. URL: Link
Ahmed S., Zlate A. Capital Flows to Emerging Market Economies: A Brave New World? Journal of International Money and Finance, 2014, vol. 48, part B, pp. 221–248. URL: Link
