Study On The Effects Of Monetary Policy And Financing Constraints On Corporate Investment Behaviors

With the development of economic globalization, the increasingly close tiesbetween the monetary policy and the international economic situation. Since theoutbreak of the financial crisis in2008, the compl ex and volatile internationaleconomic situation, and now the European debt crisis is not over yet. Many countriescontinue to adjust macro-control policies in order to save the national economy and toprevent a substantial recession. In this context, the study of the impact of monetarypolicy on investment in the formulation has a very important practical significance.The alternate reasonable of monetary policy is the leading indicator for economicoutput. For quite a long time, for the relation between leading indicators andenterprise behavior, we only carry on historical experience judgment but lack ofdeeper understanding from leading indicators to concrete enterprise behaviortransmission mechanism, especially lack of the quantization understanding b etweenleading indicators and enterprise behavior. The reason for this is that there is a splitbetween the study of the micro enterprise behavior by accounting academic and thestudy of macroeconomic policy by economic academic. Accounting scholar study therelationship between enterprise behavior and enterprise output, they always start fromenterprise behavior, and ignore the enterprise behavior will be affected by macro-economic policy. Therefore, this dissertation will combine with macroeconomicmonetary policy and its change to study micro enterprise investment behavior.This dissertation analyzes the impact of monetary policy on corporate debtfinancing with credit rationing theory, debt overhang theory etc, and discusses theimpact of monetary policy to corporate financing though issuing stock according tothe capital markets transmit path of monetary policy and combined with the markettiming theory. According to the virtue of pecking order theory and marketsegmentation theory, this dissertation points out that our country’s listed companiesencounter financing constraints and which is universality and different. Meanwhile,this dissertation analyzes the impact of financing constraints on investment with twosituations with no debt finance and debt finance. On the basis of analyzing the theoryof monetary policy impacting financing constraints and financing constraintsimpacting investment, this dissertation discusses the relationship of the three factorsfrom cash flow angle. In order to validate the impact of monetary policy to firm investment throughfinancing constraints, first of all this dissertation tests the impact of monetary policyto firm investment using respectively discrete monetary policy variable andconsecutive monetary policy variable, at the sane time, tests the impact of monetarypolicy to different financing constraints firm. The results show that investmentfluctuation in the listed companies’ is accompanied by monetary policy adjustment,i.e., higher investment rate goes in line with looser monetary policy, and vice versa.The impact of monetary policy on investment differs across firms with respect todifferent financial constraints, i.e., the heavier financial constraint a firm confronts,the larger the effect on investment from monetary policy. Then, this dissertationdirectly tests monetary policy impacting firms’ investment through influencing thefinancial constraints, and finds that tighter monetary policy deteriorates firms’external finance constraints, therefore restrains more heavily on firm’s investment.These empirical results have fully demonstrated that monetary policy adjustment willchange the company’s level of external financing constraints, and the company’sexternal financing constraints will affect the company’s investment.