An investigation on the nonlinear effects of monetary policy in the framework of the two channels of net worth and cash flow of the firms (Applying the panel quantile method)

The way monetary policy affects the real economic variables has been always important to the policy makers. In this regard many channels of monetary transmission mechanism have been introduced. The net worth and cash flow channels are the subsets of the balance-sheet channel and are newly introduced in the literature of the monetary transmission mechanism. Thus the importance of this research is the investigation of the role of the firms in the monetary transmission mechanism for the first time in Iran. Besides the aim of this article is to explore the indirect and nonlinear effects of the monetary policy through the net worth and the cash flow of the firms in the different quantiles of the received loans. The financial statements of fifty nonfinancial firms in Iran for the period of 2007-2014 and the panel quantile regression are considered. As a conclusion the results indicate that the effect of the monetary policy through the net worth is greater in the upper quantile of the loans. Also the effect of the monetary policy through the cash flow of the firms is stronger for the median quantiles of the loans.