Research On Leverage Ratio Of Non-financial Corporate In China

Since the outbreak of the international financial crisis in 2008,China’s economy has continued to decline,but the leverage ratio of the real sector has soared,and the level and growth rate of the leverage ratio of non-financial corporate are significantly higher than those of other countries and sectors.Indicates that the leverage ratio of non-financial corporate in China is divorced from the real economy,gathering a large number of risks and becoming an important "gray rhino" facing China’s economy.Therefore,how to effectively play the positive role of corporate leverage ratio,defuse debt risks,enhance the coordination between leverage ratio and the real economy has become an important problem to be solved urgently.In fact,the divorce of leverage ratio from the real economy essentially reflects the decline of leverage effectiveness,that is,corporate debt cannot be effectively transformed into output,the lack of leverage effectiveness is the key of China’s debt problem.Based on this,after the analysis of the characteristics and decision of leverage ratio of non-financial corporate in China,with leverage effectiveness as the core,systematically explores the influence of corporate leverage ratio on real economy and the effect of policy regulation.It is of great significance to understand the operating mechanism of leverage ratio of non-financial corporate,to better play the positive role of leverage ratio of corporate,and to achieve the benign dynamic balance between leverage ratio of corporate and the real economy.The research content of this paper includes:First,the paper analyzes the characteristics of the macro and micro leverage ratio of nonfinancial corporate,the reasons and consequences of high leverage ratio,and revealed the determinants of corporate leverage ratio through a dynamic general equilibrium model including credit mortgage constraint mechanism.The findings:(1)During the sample period,there is a difference between the trend of the macro and micro leverage ratio of non-financial corporate,before the financial crisis,they showed a deviation from the development trend,after the crisis,the growth of the former was significantly higher than that of the latter,which actually reflects the diminishing marginal return of capital in China.At the same time,the micro leverage ratio showed the characteristics of structural differentiation after the financial crisis,the phenomenon of high leverage was mainly concentrated in large state-owned enterprises,construction,real estate and service industries.(2)Equilibrium analysis of the model shows that corporate leverage ratio is jointly determined by micro factors,macro fundamental factors,market factors and policy factors,so corporate leverage ratio can be regulated through policy tightening.Second,from the macro level to explore the dynamic relationship between non-financial corporate leverage,leverage effectiveness and macro economy.The capital accumulation difference equation is used to explore the influence mechanism of corporate debt on economic growth,On this basis,through the exploration of the relationship between corporate debt,leverage and economic growth,this paper leads to the effectiveness of leverage,and describes it by debt investment ratio and capital output ratio,and clarify the theoretical logic of leverage ratio,leverage effectiveness and macro economy,then,by constructing Markov regime transfer vector autoregressive model(MSMH(2)-VAR(1)),this paper makes an empirical analysis on the dynamic relationship between leverage and macro economy under different leverage ratios and their effectiveness states,and uses TVAR model to estimate the critical point of leverage effectiveness and leverage ratio in the process of regime transfer.The findings:(1)There is an upper limit on corporate debt,and excessive debt will lead to a lower steady state value of capital accumulation.If the initial capital is less,it will fall into the trap of capital accumulation and lead to economic recession.(2)The decrease of leverage effectiveness makes it easy for the debt growth rate of corporate to be lower than that of leverage ratio in the process of increasing leverage,which leads to the decline of economic growth and the increase of debt risk,which is not conducive to the positive role of corporate leverage ratio;(3)The impact of corporate leverage on macro economy has significant characteristics of regime transfer,it is positive in the "leverage efficient regime",and negative in the " leverage inefficient regime ",and the impact in the two regime is asymmetric;(4)The critical points of debt effectiveness,asset effectiveness and leverage ratio in the process of regime transfer are 0.0113,0.0132 and 0.0120,respectively.Thirdly,from the micro level to explore the impact of corporate leverage ratio and leverage effectiveness on profit,profit stability and business risk.On the basis of theoretical analysis,the panel model and Logit model are used to conduct basic empirical test,influence mechanism test,interaction test,debt maturity structure analysis,heterogeneity analysis and robustness test,and the panel threshold model is used to estimate the threshold value of micro corporate leverage effectiveness.The findings:(1)Leverage ratio has an inverted U-shaped relationship with corporate profit,which negatively affects profit stability and business risk,and has an interactive effect with leverage effectiveness,the decrease of leverage effectiveness will weaken the positive effect of leverage ratio,increase the negative effect of it,and significantly increase the business risk caused by leverage ratio;(2)The mechanism analysis shows that leverage ratio may improve corporate profit by reducing corporate income tax expense and agency cost of shareholders and managers,but also reduce corporate profit stability and increase business risk by triggering inefficient investment and increasing financial cost.(3)Leverage ratio and its interaction with leverage effectiveness have heterogeneity for corporate with different debt maturities,different ownership nature,different scale and different degree of financing constraint,as well as different industries and economic development stages;(4)At the micro level,there is also a threshold effect on debt effectiveness and asset effectiveness,and there is more than one threshold value,as the leverage effectiveness drops below the threshold value,leverage ratio will have a negative impact on the business performance.Fourth,explores the effect of the implementation of regulatory policies on the leverage ratio and its effectiveness of non-financial corporate.IS-LM model is used to analyze the macro-effect mechanism of regulatory policies on corporate leverage,and then the TVP-SV-VAR model is constructed to investigate the time-varying effects of different regulatory policies on corporate leverage,leverage effectiveness and economic growth using macro-data.Finally,a panel model based on micro-data is used to investigate the structural effects of regulatory policies on different types of corporate leverage and debt of different maturities.The findings:(1)From the perspective of aggregate regulation,in the short and medium term,interest rate and money supply should be kept steady and neutral,fiscal expenditure should be effectively increased and corporate tax burden should be reduced,and financial supply-side reform should be actively implemented.In the long term,interest rate should be kept neutral,money supply should be moderately loose,fiscal expenditure should be steady and corporate tax burden should be reduced,actively implement the financial supply-side reform and cooperate with the policy of improving the efficiency of credit allocation;(2)The structure effect analysis found that the conduct of aggregate monetary policy will further aggravate the structural differentiation of corporate leverage ratio,also go against the stability of profit and the optimization of debt maturity structure,and the financial supply-side reform is conducive to the deleveraging and stable growth of non-state-owned corporate and the optimization of debt maturity structure.Therefore,for the money supply,on the basis of controlling the general supply gate,we should guide the credit funds to tilt towards non-state-owned enterprises,for the interest rate,implement targeted RRR cuts for non-state-owned enterprises,and adopt loan interest rate close to the market interest rate for state-owned enterprises.Monetary policy and fiscal policy should cooperate with each other to form policy synergy,as well as financial supply-side reform,and finally achieve a benign dynamic balance between corporate leverage ratio and real economy.