Nighttime Light and the Construction Financing Channel of Monetary Spillovers

We identify a financing-based construction channel for the international transmission of U.S. monetary policy. Our design combines high-frequency monetary policy shocks with nighttime light (NTL) big data, providing both the temporal resolution to isolate causal effects and the spatial granularity to trace mechanisms. Using China as a laboratory, we link parcel-level construction activity, measured by NTL, to land transactions and firm-level financing structures. U.S. monetary tightening reduces real activity, with larger effects for firms more exposed to foreign bond financing and tighter balance sheet constraints, and with amplification following the “three red lines” policy. Extending to a global sample, we find stronger spillover effects in emerging markets, consistent with this mechanism.