Study: "Trade Credit and the Transmission of Unconventional Monetary Policy
Science Outreach | 08 July 2020 Study: "Trade Credit and the Transmission of Unconventional Monetary Policy

The study: "Trade Credit and the Transmission of Unconventional Monetary Policy" was quoted in Jornal de Negócios to explain that support from the European Central Bank (ECB) reaches the periphery, but favors large countries.  Miguel Ferreira, BPI | Fundación "la Caixa" Chair Professor in Responsible Finance, and Pedro Pires, both from Nova SBE, Manuel Adelino, from Duke University, and Mariassunta Giannetti, from Stockholm School of Economics analyzed how asset buying programs (CSPP - Corporate Sector Purchase Program) promote business concentration at the top of the production chain. Central eurozone companies benefiting from the ECB's purchasing program, granting more commercial credit to their client companies, get competitive advantages. They are able to expand their customer base, become more dominant in the market and more able to buy other companies, promoting concentration movements upstream of the production chain. “Monetary policy interventions which systematically benefit companies with better access to capital markets, in core areas, can favor upstream concentration, with long-term consequences for the sector's structure” warn the researchers. "Thus, complementary measures aimed at small companies are an important complement to purchases of assets from the Central Bank", they conclude.

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