Monetary policy, customer capital, and market power

Morlacco, Monica; Zeke, David

doi:10.1016/j.jmoneco.2021.04.010

Cited by 14 publications

(3 citation statements)

References 43 publications

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“…Innovation has always played a crucial role in predicting an organization's long-term survivability [14]. In an era of increasing globalization, the modus operandi of organizations has been heavily influenced by rapid and disruptive changes, increased variety of customer demands, the uncertainty of markets, and strong international competition [15]. Thereby forcing organizations to acquire new technological skills and promote cooperation networks to explore new processes and business models that allow maintaining longterm profitability [16], [17].…”

Section: Business Innovation and Innovative Capacitymentioning

confidence: 99%

How Innovative are Companies? Exploring a new approach to characterize the innovation level

2022

Proceedings of WCSE 2022 Spring Event: 2022 9th International Conference on Industrial Engineering and Applications

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This study aims to develop an innovative method that allows classifying and characterizing the degree of innovation in companies. As part of this investigation, a new methodology was developed to allow for characterizing and quantifying the innovation effort of a company without the need for its feedback through surveys or questionnaires. To such end, relevant data of 571 companies available on two official databases were analyzed and discussed. As a result, an innovative framework was presented based on a dedicated set of indicators, and an empirical parameter was derived to characterize and quantify the Innovation Level of companies.

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Section: Business Innovation and Innovative Capacitymentioning

confidence: 99%

How Innovative are Companies? Exploring a new approach to characterize the innovation level

2022

Proceedings of WCSE 2022 Spring Event: 2022 9th International Conference on Industrial Engineering and Applications

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“…In more recent work, Morlacco and Zeke (2021) connect low-interest rates to the increased market power of firms through a customer capital channel (Gourio and Rudanko, 2014) in a duopolistic industry setup. Afrouzi and Caloi (2023) connect cyclicality of output growth to cyclicality of markups in models with variable markups.…”

Section: Introductionmentioning

confidence: 99%

Distribution of Market Power, Endogenous Growth, and Monetary Policy

Gu,

Singh

2024

ERWP

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We incorporate incumbent innovation in a Keynesian growth framework to generate an endogenous distribution of market power across firms. Existing firms increase markups over time through successful innovation. Entrant innovation disrupts the accumulation of market power by incumbents. Using this environment, we highlight a novel misallocation channel for monetary policy. A contractionary monetary policy shock causes an increase in markup dispersion across firms by discouraging entrant innovation relative to incumbent innovation. We characterize the circumstances when contractionary monetary policy may increase misallocation.

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“…Morlacco and Zeke (2021) argue that these dynamics could come through intangible investment, such as investing in branding and customer base. Unfortunately our data are not well suited to test this hypothesis.…”

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confidence: 99%

Does Monetary Policy Affect Non-mining Business Investment in Australia? Evidence from BLADE

Nolan,

Hambur,

Vermeulen

2023

RBA Research Discussion Papers

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We provide new evidence on the effect of monetary policy on investment in Australia using firm-level data. We find that contractionary monetary policy makes firms less likely to invest and lowers the amount they invest if they do so. The effects are similar for young and old firms, indicating that the decline in the number of young firms in Australia over time is unlikely to have weakened the effect of monetary policy. The effects are also broadly similar for smaller and larger firms. This suggests that evidence that some, particularly large, firms have sticky hurdle rates does not mean that they do not respond to monetary policy. It also suggests that overseas findings that expansionary monetary policy lessens competition by supporting the largest firms likely do not apply to Australia. We find evidence that financially constrained firms, and sectors that are more dependent on external finance, are more responsive to monetary policy, highlighting the important role of cash flow and financing constraints in the transmission of monetary policy. Finally, we find evidence that monetary policy affects firms' actual and expected investment contemporaneously, suggesting that expectations are reactive and will tend to lag over the cycle.

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Monetary policy, customer capital, and market power

Cited by 14 publications

References 43 publications

How Innovative are Companies? Exploring a new approach to characterize the innovation level

How Innovative are Companies? Exploring a new approach to characterize the innovation level

Distribution of Market Power, Endogenous Growth, and Monetary Policy

Does Monetary Policy Affect Non-mining Business Investment in Australia? Evidence from BLADE

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