Mutual Support:The Evidence Of Enterprise Groups Against The Contracting Monetary Policy

As one of the important means for the government to regulate the macro economy, Monetary policy promote the steady development of economy, stabilize prices, increase the positive effect of employment. Monetary policy impact on the national economy through the money channel and credit channel. Credit channel plays an important role when the central bank executes the monetary tightening. At this time, companies cannot get enough credit financing from commercial banks, resulting in adverse effects on the daily management. Theoretically speaking, the entity of enterprise group is large, its economic status and social status is higher than small and medium enterprises. In order to maintain a large scale operation, the enterprise group needs more funds than single enterprise, in which a large part of the need to be supplemented by commercial bank credit loan, Enterprise and commercial bank funds frequent contacts each other. Monetary tightening is bound to bring a big impact on the enterprise group. The single small and medium enterprise which most rely on its own funds affected by the impact of monetary tightening should not be severe.Since 2008, the People’s Bank of China has implemented a series of monetary tightening measures, including raising the reserve ratio of banks, controlling loans through credit planning, and recovering liquidity. Monetary tightening does not have too much impact on enterprise groups. On the contrary, the single small and medium enterprises which more rely on its own funds are faced with the plight of the shortage of funds.In order to explain the above phenomenon, this paper takes the commercial credit as the breakthrough point, studying the enterprise groups which have higher degree of demand for bank credit how to resist the impact of Contracting Monetary Policy. The single small and medium enterprises which their daily production and operation more rely on their own funds have the issue of money shortage dilemma. This paper takes enterprise group and single enterprise in the Shanghai and Shenzhen Stock Market as the research object, studying the financial data from 2004 to 2014. The study aims to explain the phenomenon through the empirical research. Study suggests that in the period of contracting monetary policy, group members support each other to against monetary tightening impact through the commercial credit. Enterprises which obtain more bank credit play a role in providing business credit to other members. Performance of alternative financing function of commercial credit to bank credit in a single enterprise is not obvious.The research conclusions of this paper will benefit the enterprise group members and the single enterprise: the members of enterprise group should recognize the positive role of commercial credit in the reallocation of funds and the growth of enterprise groups, rational using the commercial credit in order to promote the development of enterprise group; the single enterprise should produce the cluster effect, form a complete industrial chain, divide labor in the industrial chain effectively.