Monetary policy impacts small firms' investments more than large firms in Malaysia.
The study looked at how monetary policy affects firms' investment in Malaysia. It focused on how interest rates and credit availability influence firms' spending on investments. The researchers used a method called dynamic panel system GMM estimation to analyze the data. They found that both interest rates and credit availability play a role in shaping firms' investment decisions. Interestingly, small firms that face financial constraints are more sensitive to changes in monetary policy compared to larger firms. This suggests that policymakers need to consider the specific circumstances of different types of firms when designing monetary policy.