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IR19-001_Cohen+GomezPuig+Sosvilla.pdf (1.51 MB)

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Working paper

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2019

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cc-by-nc-nd, (c) Cohen et al., 2019
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/127691

Has the ECB's Monetary Policy Prompted Companies to Invest or Pay Dividends? [WP]

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Abstract

This paper focuses on how the European Central Bank’s (ECB) monetary policies influenced non-financial firms. The paper’s two main contributions are, first, to shed light on non-financial firms’ decisions on leverage, and how the ECB’s conventional and unconventional policies may have affected them. Second, the paper also examines how these policies influenced non-financial firms’ decisions on capital allocation – primarily capital spending and shareholder distribution (for example, dividends and shares repurchases). Towards this end, we use an exhaustive and unique dataset comprised of income statements and balance sheets of leading non-financial firms that operate in the European Economic and Monetary Union (EMU). The main results suggest that ECB’s monetary policies have encouraged firms to raise their debt burden especially after the global recession of 2008. Finally, the ECB’s policies, mainly after 2011, seem to have also stimulated non-financial firms to allocate more resources towards not only capital spending but also shareholder distribution

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Política monetària, Dividends, Capital

Subject (English)

Monetary policy, Dividends, Capital

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Documents de treball (Institut de Recerca en Economia Aplicada Regional i Pública (IREA))

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COHEN, Lior, SOSVILLA RIVERO, Simón and GÓMEZ-PUIG, Marta. Has the ECB's Monetary Policy Prompted Companies to Invest or Pay Dividends? [WP]. IREA – Working Papers. 2019. Vol.  IR19/01. [consulted: 17 of August of 2026]. Available at: https://hdl.handle.net/2445/127691

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