Study On The Impact Of Shareholder Structure Reform On The Monetary Policy Transmission Through Stock Market

Monetary policy transmission mechanism is the transmission channel through which the monetary policy affects real economy. Even more, it is the basis on which the monetary could work effectively. Theoretically, traditional transmission could be classified into 4 channels:interest channel, money supply channel, credit channel and exchange rate channel. As the time goes by, finance market grows very soon and security market has become one of the most important parts of it. Recently, the security market has great influence on entity economy. Greenspan, chairman of the Federal Reserve has stated, the new challenges America's monetary policy faces in the new period are mainly from the capital market.As the deepening of economic system reform and the development of the market-oriented economy in our country, the environment in which monetary policy work has changed. The development of capital market has greater impact on the policy transmission. Therefore, the study on security market has practical significance.However, China's capital market and listed companies has been troubled by split share structure for decades. It distorts the pricing mechanism of security market and make the market couldn't develop healthily. In April 29,2005, our country started shareholder structure reform, which is the most efficient way to solve the problem of split share structure. This systematic reform will promote healthy development of the capital market. This reform will bring great impact on the security in our country. And this paper means to study the impact of this reform on stock market channel.Firstly, this paper introduces the traditional theories about monetary policy transmission mechanism. Then, it states that stock market plays a more and more important part in our economy and become a channel to transmit monetary policy, which mainly includes wealth effect, Tobin's Q effect, balance sheet effect and liquidity effect. The next part mainly states the origin and disadvantages of split share structure, as well as the impact of shareholder structure reform on the security market. In order to test the impact practically, this paper then gives positive analysis on the stock market channel. Finally, the author analyzes the results of the positive analysis and give some suggests to promote the stock market develop healthily.There are many researchers have studied the Tobin's Q effect and wealth effect of security market at home and abroad, while they seldom pay attention to the effect after shareholder structure reform. And it is the innovative points of this paper, which studies the stock market channel under the background of the reform. An in the positive analysis, considering of the characteristics of time series, the unit root test and co integration are used to test the variables. In order to test the impact of the reform, it is quantified as a dummy variable and introduced into the model. However, because the time of shareholder structure reform is not long, the sample period is somewhat short, which will cause the results of the analysis not so reliable. But this paper tends to study the trend through the analysis. Besides, there are few references about the impact of shareholder structure reform on stock market channel. Therefore, this paper inevitably has some disadvantages.According to the results of the positive analysis, shareholder structure reform has not promoted the stock market channel efficiently. The paper analyzes the reasons of the results, and suggests that we should treat the reform objectively. Although the reform may bring some problem to the stock market, it will promote our capital market developing healthily from, a long-term point of view. Finally, the author propose that the administering authorities should not ignore the problems caused by shareholder structure reform and pay attention to the reform and perfection of supplementary measures.