The Impact of Loose Monetary Policy on the Competitiveness of Czech Firms

The aim of this paper is to examine whether the policy of low interest rates and exchange rate commitment of the Czech National Bank affected the competitiveness of non-financial firms in the Czech Republic in the sectors of agriculture, construction and manufacturing. Panel techniques are employed to investigate the impact of monetary policy on selected indicators of firms’ competitiveness, measured by financial performance in this study. Size and sectoral characteristics are reflected when analysing the impact of monetary policy. The empirical evidence is based on firm-level data from the Amadeus database for the period between 2006 and 2015. Evaluating monetary policy effects on the whole sample, our empirical evidence suggested that the competitiveness of Czech firms measured by indicators of financial performance increases. The results vary among profitability ratios, but the highest influence was investigated for the ROE ratio. We found that monetary policy affected firm-specific characteristics, and firm-specific variables in interaction with monetary policy affected competitiveness of firms. FX interventions were also a significant factor in competitiveness in all cases

Testing rational speculative bubbles in Central European stock markets

This study examines the existence of rational speculative bubbles in selected Central European stock markets. We employed the duration dependence test for bubble detection, which we believe provides reliable results for the specific properties of the markets studied. In addition to the stock market indices the prices of individual stocks with the highest capitalization were investigated in order to identify the source of bubble. In contrast to the findings of previous studies on bubbles in emerging markets, no significant bubbles in asset prices were reveiled, except for the Polish stocks of chemical companies from 2004-2007 and Czech and Hungarian stocks of new and prospective sectors

Testing rational speculative bubbles in Central European stock markets

This study examines the existence of rational speculative bubbles in selected Central European stock markets. We employed the duration dependence test for bubble detection, which we believe provides reliable results for the specific properties of the markets studied. In addition to the stock market indices the prices of individual stocks with the highest capitalization were investigated in order to identify the source of bubble. In contrast to the findings of previous studies on bubbles in emerging markets, no significant bubbles in asset prices were reveiled, except for the Polish stocks of chemical companies from 2004-2007 and Czech and Hungarian stocks of new and prospective sectors