The Study Of The Influence Of Monetary Policy Changes On The Dynamic Adjustment Of Enterprise Capital Structure

Capital structure is the core problem when enterprises making financing decisions.The dynamic adjustment of capital structure is of great importance during enterprise’s development and decision-making process. Many scholars has studied enterprise’s capital structure from the perspective of static for a long time, however the static capital structure study is of hysteresis quality. Studying the adjustment of enterprise’s capital structure from the perspective of dynamic is of great significance for optimizing enterprise capital structure and promoting enterprise value. Nowadays, some scholars analyze the influence of macroeconomic environment on enterprise capital structure from the perspective of dynamic, but few people study the influence of policy factors on enterprise capital structure in macro-economy. Giving that monetary policy is the most frequently used methods by the monetary authorities to achieve the microeconomic goals, this paper, based on the dynamic changes of monetary policies, focuses on studying the relation between microeconomic policy and the dynamic adjustment of enterprise capital structure.Choosing the listed enterprise of A-share manufacturing in Shanghai and Shenzhen as research samples and having selected the annual data from 2004 to 2014, this paper analyzes the influence of monetary policy changes on enterprise capital structure from the perspective of both static and dynamic. The empirical results shows that monetary policy changes has profound influence on Chinese enterprise capital structure. Tight monetary policy increase the enterprise debt, while loose monetary policy decrease the enterprise debt. That is to say, positive correlation exists between the change of enterprise capital structure and the real interest rate changes; while negative correlation exists between the change of enterprise capital structure and changes in money supply growth rate. The adjustment of enterprise capital structure has different reaction speed to different monetary policy. Tight monetary policy slows down the reaction speed of enterprise capital structure adjustment, while loose monetary policy speeds up the reaction speed of enterprise capital monetary policy. That is to say, negative correlation exists between the reaction speed of enterprise capital structure and the actual interest rate changes, while positive correlation exists between the reaction speed of enterprise capital structure and changes in money supply growth rate. The research results showsthat the dynamic change of monetary policies do have influences on enterprise capital structure. This paper provides some practical advices for optimizing enterprise capital structure and for government to create a favorable external environment, monetary authorities to improve regulation and innovation, enterprises to adjust their management mode.Innovative point of this paper: it deeply and comprehensively analyze the influence of monetary policy change on enterprise capital structure from the perspective of static and dynamic, which to some degree broaden our thought on capital structure study.Besides, this paper quantifies monetary policy, which overcome the shortcomings of dummy variables including abstract, subjective and lack of consistency and effectively reflects the influence of monetary policy changes.