Template-Type: ReDIF-Article 1.0
Author-Name: Zukarnain Zakaria
Author-Workplace-Name: Management Department, Faculty of Management and Human Resource Development, Universiti Teknologi Malaysia, 81300 UTM Skudai, Johor, Malaysia 
Author-Email: m-zukar@utm.my
Title: Does Financial Structure Matter in Determining the Effectiveness of Monetary Policy? A Comparison Between Civil-Law and Common-Law Countries
Abstract: This paper compares the effectiveness of monetary policy between civil-law and common-law countries by using the impulse response of monetary policy on the level of investment and consumption. This comparison is made to determine whether countries of common-law origin are less sensitive to monetary policy actions compared with civil-law countries. Theoretically, we expected monetary policy is to be more effective in civil-law countries, in which financial structures are generally more bank-based as compared to common-law countries, in which financial structures are more market-based. The impulse response functions were generated through the estimation of first-differences VAR. The findings show that the impact of monetary policy on investment and consumption is relatively stronger, responds more quickly and is long lasting in civil-law countries compared with common-law countries. 
Classification-JEL:
Keywords: monetary policy, legal structures, financial structures, impulse response
Journal: Asian Academy of Management Journal of Accounting and Finance
Pages: 87-118
Volume: 4
Issue: 1
Year: 2008
File-URL: http://web.usm.my/journal/aamjaf/vol 4-1-2008/4-1-5.pdf
File-Format: Application/pdf
Handle: RePEc:usm:journl:aamjaf00401_87-118