Three essays in macroeconomics

Abstract

Two different themes, both within Macroeconomics, are tackled in this work. The first and second chapters study how enterprises access financial resources to finance their investment. The third chapter relates to international macroeconomics, analysing the effect of foreign exchange interventions on the exchange rate level. How do Chinese small- and medium-sized enterprises manage to bypass financial constraints and invest, despite their limited access to formal bank loans? What is the impact of the recent banking sector reforms in China? In my first chapter, I show evidence of the crucial role played by alternative sources of funding - namely family, friends, non-listed equity and further informal institutions - in supplementing usual financing sources like bank loans and reinvested profits. I conclude that liberalizing the banking sector significantly increases steady-state aggregate production and capital levels. Tightening the regulation of the alternative finance sector remains detrimental to small, young enterprises, even if simultaneous to liberalizing the banking sector. The second chapter suggests a theoretical mechanism driving uctuations in the ability of newcomer enterprises to obtain financial resources for their investment projects. I examine the differentiated impact of a shock in commercial banks' refinancing cost on loan distribution, distinguishing among borrowers according to their previous loan history with the bank. Since loan officers have more information on incumbent borrowers than on newcomers, they may prioritize loans to incumbents against loans to newcomers, as a response to the shock. The last chapter (joint with G. Adler and R. C. Mano) studies the impact of foreign exchange intervention for a large panel of countries. We find robust evidence that foreign exchange intervention affects the level of the exchange rate in an economically meaningful way: a country purchasing (selling) its own domestic currency appreciates (depreciates) it. In addition, these effects are found to be quite persistent.