The paper investigates whether the effects of monetary policy on firm investment can be transmitted through leverage. The findings indicate that monetary contractions reduce investment for highly leveraged firms. The estimates imply that a 1percentage point increase in leverage reduces...

Using a panel dataset of over 800 listed manufacturing firms for 1995-2005, the paper examines whether bank-firm relationships influence a firm’s financing constraints. The results indicate that a firm with fewer related banks maintains less cash and its equivalents even in the presence of...