Has the negative interest rate environment changed the financing structure of firms?

  • Inês da Cruz Morais Pais Jorge (Student)

Student thesis: Master's Thesis


In June 2014, the European Central Bank (ECB) cut its deposit facility rate by 10 basis points, setting it into negative territory in an attempt to stimulate economic growth. This new unconventional monetary policy tool's effectiveness is being extensively studied, mostly focused on the impact on banks, without reaching a consensus yet. In contrast, this dissertation focuses on non-financial firms, aiming to understand the potential impact of the negative interest rates environment on their financing structure. Taking a methodological approach similar to Bougheas et al. (2006), we confirm that constrained firms (smaller, riskier, and with less collateral) are more vulnerable (have more short-term debt) to a monetary policy tightening. The negative rates environment's impact is modest, with riskier firms containing their level of external finance relative to other periods.
Date of Award29 Jan 2021
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorCarla Sofia Soares (Supervisor)


  • Negative interest rates
  • Monetary policy transmission
  • External finance


  • Mestrado em Economia

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