The Impact Of Monetary Policy Uncertainty On Corporate Financing Behavior

With China’s economic development entering the "new normal",economic growth is gradually slowing down,coupled with the impact of the coronavirus pandemic and the intensification of the "Russia-Ukraine conflict",resulting in a global supply chain crisis,which also affects investor sentiment,leading to increased volatility in financial markets and more exposure to many financial risks.As a result,Chinese companies are facing a tough external environment.For the internal development of enterprises,corporate financing is one of the important decisions for enterprises.With regard to corporate financing methods,bank loans are still the most common financing method for Chinese enterprises,followed by bond financing and equity financing.However,the declining growth rate of the scale of bond and equity financing has made it more difficult for enterprises to raise funds.Therefore,in a complex and volatile internal and external environment,it is necessary to study the impact of monetary policy uncertainty on corporate financing.Considering the complex and volatile external environment,this paper combines macro and micro perspectives to analyse corporate finance and further comb through the historical literature to summarise the transmission mechanism of the impact of monetary policy uncertainty on corporate finance.This paper selects A-share companies listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange as the research subjects and chooses the period from Q1 2007 to Q42021 as the research interval.The interval contains rapid economic growth,slowdown and a complete stock market boom cycle.The impact of monetary policy uncertainty on corporate finance is further investigated and the following conclusions are drawn: monetary policy uncertainty has a significant negative impact on corporate debt financing and equity financing,with a certain lag and persistence.Monetary policy uncertainty has no significant impact on the maturity structure of corporate finance and corporate finance outcomes in the short run,but has an impact in the long run,probably due to the difficulty of adjusting corporate long-term debt in the short run.On this basis,the paper further investigate the transmission mechanism of monetary policy uncertainty on corporate finance,and find that monetary policy uncertainty affects corporate finance behaviour through both the supply and demand sides of the equation.At the supply side,monetary policy uncertainty positively affects corporate debt financing through the bank risk-taking channel;it negatively affects corporate equity financing,but to a lesser extent.In addition,monetary policy uncertainty also negatively affects corporate debt financing and the maturity structure of corporate finance through the supply of bank credit.At the level of corporate demand,it significantly and negatively affects the scale of corporate debt financing and equity financing mainly through the channels of corporate investment demand and cash holding.The main innovation of this paper is to study micro corporate finance from a macro perspective,combining macro and micro studies.In addition,based on a review of the literature,the mechanism of the impact of monetary policy uncertainty on corporate finance is summarised and empirically tested.Based on the above findings,this paper makes the following recommendations:(1)Minimise uncertainty when formulating monetary policy,increase policy transparency,keep the volatility of monetary policy within a reasonable range and maintain a prudent monetary policy.(2)Communication between the government,enterprises and banks should be strengthened to reduce the severity of information asymmetry.Formulate relevant policies to enhance government-enterprise exchanges and bank-enterprise cooperation.(3)When formulating financing strategies,enterprises should,in addition to considering their own hard and soft strengths,comprehensively consider changes in the external policy environment and reasonably adjust their financing structures.