Monetary Conditions and Firm Performance in Czech Agriculture: Evidence from Firm-Level Panel Data

Mansoor MaitahMichaela UrbanováKarel MalecKarel Tomšík

DOI 10.7160/aol.2026.180206
No 2/2026, June
pp. 87-102

Maitah, M., Urbanová, M., Malec, K. and Tomšík, K. (2026) "Monetary Conditions and Firm Performance in Czech Agriculture: Evidence from Firm-Level Panel Data", AGRIS on-line Papers in Economics and Informatics, Vol. 18, No. 2, pp. 87-102. ISSN 1804-1930. DOI 10.7160/aol.2026.180206.

Abstract

The aim of this paper is to examine how monetary conditions are associated with firm performance in the Czech agricultural sector. Using a balanced panel of 167 firms observed over the effective estimation period 2016-2024, the paper estimates static firm fixed-effects models for three complementary outcomes: return on equity (ROE), year-on-year log sales growth and cash flow to assets. The objective is to assess whether tighter monetary conditions were linked to weaker profitability, slower expansion and lower internal financing capacity in the broad agricultural economy. The results indicate that higher interest rates are associated with lower ROE, weaker sales growth and lower cash flow to assets, while higher real rates are negatively associated with ROE and internal liquidity. Exchange-rate appreciation is positively associated with sales growth and cash-flow capacity, which suggests that, in this sector, the imported-input cost channel may dominate the conventional export-price competitiveness channel.

Keywords

Monetary policy, interest rate, exchange rate, firm performance, agriculture, Czech Republic.

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