Monetary Policy, Financing Constraints And The Change Of Company’s Cash-holding Level

In the era of Cash is King, studying the change of company cash-holding level under different monetary policy will not only has strong reference value for monetary policy making in China, but also has a certain guiding significance for micro cash management.This article based on the theoretical analysis of the relationship of monetary policy, financing constraints and cash-holding level. In the empirical part using multiple linear regression with the panel data respectively tested:(1) How monetary policy influence the change of China’s listed companies cash-holding level through the credit transmission channel, interest rate transmission channel and asset price transmission channel;(2) Monetary policy’s influence on company’s cash-holding level with different financing constraints degree;(3) Under the conditions of similar financing constraints degree, the monetary policy’s influence on the cash-holding level of ST companies and its matching non-ST companies. The results showed that:(1) Monetary policy significantly influence company cash-holding level, which is mainly through the credit transmission channel and the interest rate transmission channel. The significant relationship between the loose degree of monetary policy and the change of listed companies cash-holding level do exist: When supply of money shrank or 7-day repurchase rate rise, the companies will increase cash-holding level; When supply of money increase or 7-day repurchase rate decline, the companies will lower cash-holding level.(2) Enterprises with different degree of financing constraints are influenced by monetary policy changes at different levels:financing constraints companies will more affected by monetary policy compared with the non-financing constraints.(3) With similar degree of financing constraints, the ST companies will more affected by monetary policy compared with the matched non-ST companies.