Market Interest Rate?Corporate Heterogeneity And Leverage Ratio Of Listed Companies Of China

Since 2008,China's macro leverage ratio has been rising.Among them,the problem of rising leverage in non-financial corporate sectors has attracted widespread attention at home and abroad.In terms of micro-leverage,state-owned enterprises and private enterprises have become divided,state-owned enterprises have entered a period of leverage,while the level of leverage of private enterprises has declined.Under the condition that China's economy has entered a new normal state and the economic growth rate has slowed down,the rapid increase in leverage ratio may agglomerate risks and affect financial stability.Therefore,the central government proposes a policy of de-leveraging,especially to reduce the leverage ratio of non-fi nancial enterprises,reduce economic fluctuations,and prevent financial risks through "structural deleveraging".With the continuous advancement of interest rate marketization reform in China,the interest rate transmission mechanism of monetary policy has been continuously in proved,and the role of price-based monetary policy with interest rate as an intermediary has gradually become prominent,which has an important impact on the financing behavior of micro-enterprises.Market interest rates have an impact on micro leverage by affecting the company's debt financing costs and the choice of financing methods.In addition,due to China's special institutional environment,corporate heterogeneity will make the impact of interest rate on micro-leverage ratio different.The nature and scale of property rights are twoimportant aspects of heterogeneity.When the interest rate changes,state-owned enterprises and private enterprises,large-scale enterprises and smalls' scale of the leverage will change.The questions that this paper wants to explore are:the impact of interest rates on the leverage of listed companies and the impact of interest rates on the leverage of heterogeneous firms.The research in this paper has two aspects:on the one hand,it can enable the company to correctly understand the role of market interest rates in its financing process,and prompt them to make reasonable financing decisions,and then optimize the adjustment of the leverage ratio structure;on the other hand,it can be recognized the role of interest rates on heterogeneous companies,provides a reference for the implementation of differentiated interest rates and further provides ideas for structural de-leverage.This paper takes the semi-annual data of China's A-share listed companies in 2007-2018 as the research sample,and selects the overnight interbank lending rate as the market interest rate index to study the impact of interest rate changes on the company's leverage ratio.First,a two-way fixed-effects model was used for regression analysis of the full sample data.Secondly,considering the influence of heterogeneity factors,according to the nature of property rights,the listed companies are divided into state-owned enterprises and private enterprises.According to the scale,they are divided into large-scale enterprises and small-scale enterprises,which respectively analyze the changes in leverage ratio when interest rate changes.In addition,this paper further studies the impact of the intersection of the two,the listed companies are divided into four categories of large state-owned enterprises,small state-owned enterprises,large private enterprises,small private enterprises,a more detailed analysis of the impact of interest rates on leverage.Considering the problem of endogeneity of variables,this paper tests the robustness of the regression model by selecting different interest rate indicators and adopting two-stage least squares method.The results show that the research conclusion is stable.This paper draws the following conclusions:First,for China's A-share listed companies,there is a negative correlation between interest rates and leverage ratios.The increase in interest rates will reduce the company"s leverage ratio.Second,compared with state-owned enterprises,the leverage ratio of private enterprises is more sensitive to the reaction of interest rate changes.When interest rates rise,the leverage ratio of private enterprises declines to a greater extent.Third,when interest rates rise,the leverage ratio of small-scale enterprises declines more than that of large-scale enterprises.Fourth,the interest rate and leverage ratio of large state-owned enterprises are positively correlated.The leverage ratio of small state-owned enterprises is not sensitive to changes in interest rates.Regardless of large or small private enterprises,there is a significant negative correlation between interest rates and leverage ratios.According to the research conclusions of this paper,the following policy recommendations are proposed:First,we must speed up the reform of interest rate marketization,improve the monetary policy interest rate transmission mechanism,appropriately raise interest rates to reduce the leverage ratio of micro-enterprises,and promote the de-leverage of the real economy on the basis of financial deleveraging.Second,adhere to the idea of"structural de-leverage".In the process of using interest rate to leverage,consider the influence of the nature of property rights,accelerate the de-leverage of state-owned enterprises through measures such as debt-to-equity swaps,and give private enterprises preferential interest rates to promote their development.Third,de-leverage should consider the factors of enterprise scale,appropriately relax the loan restrictions on small-scale enterprises,and solve the difficulties encountered in the financing process.Fourth,it is necessary to implement differentiated interest rates for different types of enterprises.At the same time,companies must adjust the level of leverage as interest rates change,recognizing the possible financial risks in the financing process.In addition,it is necessary to broaden financing channels,strengthen financial innovation,and reduce absolute dependence on bank loans.The innovations of this paper are as follows:First,most of the previous studies have analyzed interest rates as part of macroeconomic variables or using policy interest rate indicators.This paper uses market-based interest rate indicators to study its relationship with leverage ratio separately,supplementing research on interest rate transmission mechanisms under conditions.Second,this paper considers the two heterogeneous characteristics of property rights and scale,subdivides-the scope of research,and provides ideas for structural de-leverage.Third,combining macro and micro factors is conducive to providing research proposals for both government and corporate entities.