The Impact Of Monetary Policy To The Enterprise Capital Structure

This paper begins with the volatile Macroeconomic in recent years,all the monetary authorities have carried out the appropriate monetary policies globally,facing the radical changes in monetary policy,and how companies can make appropriate capital structure ajuestment in order to achieve stable development.By reviewing the relavant literatures and papers and also combining with China’s present economic condition and related regulations,we firstly analyze how monetary policy affect company’s capital structure decision, we analyze the impact of some variables such as the interest rate of loan,required reserve ratio, the growth rate of GDP and CPI,the level of income tax of enterprise especially. Secondly,institutional factors attributed to present overall capital structure are discussed.Thirdly,applying the econometrics software Eviews,we choose the overall domestic capital structure in the decade of1996-2010as the dependent variable,and choose some macroeconomic indicators as independent variables for regression analysis.We further choose the80listed companies’capital structure in the decade of2002-2011Q3as the dependent variable and some macroeconomic indicators as the independent variables for the panel analysis.The results obtained by the two models are almost consistent,the regression results indict that coporate’s debt ratio has a positive correlation with lending rates and GDP growth rate and a negative correlation with inflation and coporate income tax rate.all of these prove that monetary policy does have impact on corporate capital structure. The long-term capital structure of enterprise depends on the characteristics of industry and company’s own tradition and financial characteristics, but in the short term companies need to analyze and foresee the tendency of monetary policy and make appropriate financial decisions after considering the monetary policy.The government should endeavor to expand the investment and financing channels and improve the construction of capital market and built a better ruled and standerdized capital market.