earticle

영어

I provide evidence on the effect of monetary policy shocks on research and development (R&D) in setting with and without firm-specific variables. I identify monetary shocks by orthogonalizing policy rate change with respect to economic forecast information. Using the shock, I examine the responses of the R&D expenses to increase in the short-term interest rate changes. My empirical results prove that R&D investment gradually decreases in response to monetary policy shock. However, this trend becomes less apparent for chaebols, which are unique form of conglomerate in Korea, due to their access to internal financing within affiliates, while the R&D investment of non-chaebols to monetary policy shock decrease at statistically significant level. In particular, non-chaebols with a high Tobin’s-Q and firm size are more responsive to monetary tightening shocks than those with low ones, which are in consistence with previous researches.