TY  - BOOK
AU  - Aizenman,Joshua
AU  - Cheung,Yin-Wong
AU  - Qian,Xingwang
ED  - National Bureau of Economic Research.
TI  - International Reserve Management, Global Financial Shocks, and Firms’ Investment in Emerging Market Economies
T2  - NBER working paper series
PY  - 2021///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - September 2021; Hardcopy version available to institutional subscribers
N2  - We examine the effects of active international reserve management (IRM) conducted by central banks of emerging market economies (EMEs) on firm investment in the presence of global financial shocks. Using firm level data from 46 EMEs from 2000 to 2018, we document four findings. First, active IRM positively affects firm investment - the effect strengthens with the magnitude of adverse external financial shocks. Second, financially constrained firms, compared with unconstrained ones, are less responsive to active IRM. Third, our results suggest that the country credit spread is a plausible causal channel of the positive IRM effect on firm investment. Fourth, the policies of capital controls and exchange rate managements are complementary to the IRM - it is beneficial to form a macro policy mix including active IRM to safeguard firm investment against global financial shocks. Further, our results indicate the IRM effect on firm investment is both statistical and economical significance and is relevant to the aggregate economy
UR  - https://www.nber.org/papers/w29303
UR  - http://dx.doi.org/10.3386/w29303
ER  -