Does Interest Rate Changes Affect The Enterprise Credit Financing Behavior?

Interest rate is the price of money. Interest rate policy regulates the nationaleconomic life in many ways, which is a very important part of China’s monetary andfinancial policy and is also an important tool to executive macro-economic policy.Countries can use the interest rate policy rationally to balance the supply and demandof social capital, to promote economic development, to keep social stability. Sincereform and opening-up, it’s improving the role of interest rate policy regulatingmacro-economic appeared gradually, along with relaxation of our control of economyand the attention of monetary authorities to interest rate increased.From the micro perspective, interest rate affects the enterprise credit financingthrough the capital cost, and from the macroscopic angle, the rising or reducing ofinterest rate is one of monetary means, which our country uses according to differentperiod of macro economic development situation. In addition, in face of interestspread change caused by interest rate changes, the reactions of credit financialinstitutions are different, and so the impacts of credit financing of enterprise aredifferent. In short, interest rate movements can certainly affect enterprise’s creditfinancing in theory. But in the real economic activity, what changes of enterprise’sfinancing strategy may occur in face of the changes of interest rate from2002to2008?This paper will issue this problem through the empirical research method. It’s dividedinto four parts, the first part expounds the research background, purpose, significanceand the related literature at home and abroad, at the same time introduces researchframework, methods and the innovation of this paper; the second part demonstrate theeffect of interest rate changes to the enterprise’s credit financing theoretically; thethird part uses the data of the listed companies came out of Shanghai and ShenzhenStock Markets from2002to2009, makes a empirical regression model to analysisdifferent interest rate changes’ influence to different property right, different areas,different growth and financial constraint level of enterprises, and then gives therelevant conclusions; the fourth part summarizes research conclusion, indicate thedifferent of this study and the existing literature conclusion and puts forward thelimitations of it, and according to its conclusion and the current economicdevelopment situation for interest rate, it puts forward some relevant suggestions.Used empirical studies, this paper found that: interest rates and enterprise creditfinancing do have relation, which is a significant negative correlation, when interestrate rises up the bank credit of enterprise decreases correspondingly, and when interest rate drops bank loan increases correspondingly.