Monetary Policy And Dynamic Adjustment Of Capital Structure

The research on capital structure adjustment under the dynamic framework has been insufficient since the research of company capital structure began late in China.Although most studies focused on analyzing the impact of characteristic variables on the target capital structure and the adjusting speed,the research on the dynamic adjustment of capital structure from macro perspective especially based on monetary policy is still scarce.Based on the transmission mechanism of monetary policy,analyzing monetary policy and the dynamic adjustment of enterprise capital structure can contribute to understanding the effectiveness of monetary policy transmission to individuals and the effect of the monetary policy transmission mechanism in our country,to some degree,which can be considered as a benchmark for making monetary policy.From the perspective of the dynamic adjustment of capital structure,analyzing the effect of monetary policy on capital structure adjustment speeds can help enterprises to measure the external financing environment more clearly when making the capital structure adjustment,which enables enterprises to adjust the financing channels more actively.In order to explore the impact of external financing environment changes on the dynamic adjustment of enterprise capital structure and the differences among financing constraint degree,this paper analyzes the effect of monetary policy on capital structure adjustment speed and the deviation degree based on the monetary policy transmission mechanism and the theory of capital structure dynamic adjustment.In this paper,out argument will proceed as follows,initially some existing literature about capital structure theory will be sorted out and discussed based on its generation and development respectively.Then some literatures about the transmission mechanism theory of monetary-policy and the dynamic adjustment will also be identified and discussed.As changes in monetary policy and the macro financing environment and the influence of the financing behavior of the individuals will be considered as central concept,some hypothesis will be suggested as follows in terms of the impact of monetary policy on the dynamic adjustment of enterprise capital structure: Monetary policy has a significant impact on the speed of capital structure adjustment,the price channel(interest rate)has a negative influence on the adjustment speed,and the quantity channel(supply)has a positive influence on the adjustment speed;The looser monetary policy,the faster capital structure adjustment for weak financing-constraints enterprises,however,there are some differences between the loan interest rates and money supply,the influence of financing constraints,weak enterprise capital structure adjustment speed is more sensitive to interest rate,financing constraints of corporate capital structure adjustment speed is more sensitive to the money supply;The influence of monetary policy on the adjustment speed of capital structure is also asymmetrical,the adjustment speed of the enterprise capital structure with insufficient debt is more influenced by monetary policy;Monetary policy also has an impact on the degree of deviation of capital structure.The looser monetary policy,the smaller the deviation degree of capital structure.Based on 819 samples of A-share listed companies from 2004 to 2016,some conclusions will be suggested by building the partial adjustment model about proxy variable monetary policy and capital structure lags behind the expansion of the cross terms of first-order.Moreover,this paper will distinguish and analyze differences between the degree of financing constraints and liabilities.In addition,the influence of monetary policy on the adjustment effect will be demonstrated by building the capital-structure deviation model.Through conducting regression analysis based on the DIF-GMM estimation method,the empirical results suggest that the capital structure adjustment speed is affected by the growth of money supply,the faster the money supply growth,the faster the capital structure adjustment.The degree of financing constraints have modulating effects to this effect,the stronger the degree of financing constraints of enterprises,the money supply to more positive influence on capital structure adjustment speed.However,the influence of loan interest rate on China's capital structure adjustment speed is not obvious,which reflects the poor transmission effect of monetary policy in China.Then this paper verifies that China's capital structure adjustment speed has obvious asymmetry,and the upward adjustment speed is greater than the downward adjustment speed;But indebted companies,their money supply has a more significant impact on capital structure adjustment.In addition,this paper also proves the monetary policy impact on capital structure deviation,found that the looser monetary policy effect of capital structure adjustment,the better,and in financing constraints and liabilities does not exist differences in different enterprises.Based on the empirical results,it is suggested that the current capital structure of listed companies in China to adjust speed is not high,about 18% or so,because our country credit rationing phenomenon more and do not have a high level of interest rate marketization,the interest-rate channel has no obvious effect on the speed of capital-structure adjustment,the interest rates of China's monetary policy has an insignificant effect on the micro individual economic behavior of conduction.Finally,this article suggests some significant recommendations based on the empirical analysis of the above results,from reducing their own financing constraints,optimization of external financing environment two aspects to the enterprise itself and the monetary authorities Enterprises should reduce the degree of information asymmetry by enhancing information disclosure to reduce internal financing constraints and raise financing capacity,increase the sensitivity of monetary policy and adjust the monetary policy according to the trend of macro economy and monetary policy change.Regarding of the external financing environment,the government should accelerate the development of the corporate bond market and optimize the external financing environment.Secondly,improve the indirect creditor's rights financing environment,strengthen the construction of enterprise credit integration platform to reduce the cost of the supervision of enterprises,reduce the bank credit rationing phenomenon,reduce the financing difficulty of small and medium-sized enterprises.For monetary authorities,it is necessary to strengthen the interest rate marketization so that the transmission effect of interest rate can be truly exerted,in other words,which can fully reflect the regulating effect of interest rate on the economic behavior of micro individuals.