Working Paper: Can Central Banks Boost Corporate Investment: Evidence from the ECB Liquidity Injections

Working Paper - May 2018 - No. 126

Authors Daetz, Stine Louise
Subject The European Central Bak - ECB; Market operations; Monetary policy; Economic activity and employment
Type Working paper
Year 2018
Published 18 May 2018
Can monetary stimulus boost corporate investment? We answer this question by studying ECB's 2011-2012 Longer-Term Refinancing Operations (LTROs). While we find that the LTROs helped to decelerate the declined in Eurozone firms' investment our results also show that banks' use of LTRO funds is negatively associated with their clients' investment. Overall, the paper highlights the difficulty of boosting investment by injecting liquidity into the banking system.