The Effect Of Monetary Policy On Relationship Between Bank Loans And Corporate Performance

Manufacturing industry as the pillar of the national industry,exert a supporting effect on economic growth.However,there are the problems manufacturing in China.For example,the lack of innovation,the low additional value of product,high production costs,overcapacity.These problems result in the poor manufacturing overall profitability.Our country’s economic growth slowed markedly in recent years.In order to deal with this situation,the central bank launched loose monetary policy,by increasing the money supply growth rate,lowering interest rates to spur investment to increase the overall demand to promote economic growth.Bank loan is the major source of external financing of enterprises in our country.Monetary policy will affect the enterprise’s external financing and investment environment.When monetary policy changed from tight to loose,banks and other financial institutions can increase the supply of credit scale,reduce the enterprise financing costs,ease enterprise financing constraints,provide the financial support for increasing investment of the enterprise,encourage enterprises to expand investment scale.In this policy environment,China’s manufacturing industry average annual extent of loans showing a rising trend.So,if abundant capital inflows from bank loans can improve enterprise’s performance?And whether this relationship will differ between different nature of property right of enterprise?To this end,this article will verified these questions by combining theoretical analysis and empirical research method.In this paper,the structure of the arrangement is as follows:The first part is the introduction.Firstly introduce the background of the research topic,and illustrate the research significance of this topic.Then put forward in this paper the research ideas and research methods,comb out the main research train according to the research frame.Finally point out the possible innovation points.The second part is the literature review.In this part,literatures of both at home and abroad for debt financing and corporate performance relationship,mechanism of monetary policy and credit discrimination is reviewed,the previous research conclusions are summarized.Combining the current relatively loose monetary policy environment,lead to the research topic of this article.The third part is the theoretical analysis and hypothesis.This part carries on the analysis about the present demand for credit of our country manufacturing industry.On this basis,the relationship of increase in credit with performance is analyzed,combining of balance theory and agent theory.Based on the theoretical analysis,the research hypothesis of this article is proposed.The fourth part is the research design.This part includes the definition of data sources,variable,the corresponding models,assumptions and sample selection.The fifth part is regression analysis result.Firstly this part makes descriptive statistics on the samples of this research.And then compare the credit amount in group,namely the credit amount under tight monetary policy and loose conditions.This part also compares the credit stock and operating profit margin of different kinds of companies that are state-owned and non-state-owned.Secondly analyze the correlation of variables.Finally,based on the hypotheses the regression result is analyzed,On this basis further analyzed the influence of adding different debt maturity of bank loans on the enterprise performance.The sixth part is devoted to research conclusions and policy suggestions.Based on the regression results and combining with the corresponding theory this part analyses the research conclusion of this article,put forward policy suggestions in view of the conclusion.In addition,this part also analyzes the limitations of this study and points out the deficiency of this study.Through the study of this paper I draw the following conclusions:Under the loose monetary policy,increasing bank lending has a negative impact on the performance of manufacturing enterprises in our country,and the negative effect in state-owned enterprises is more prominent;Through further analysis I found that increased long-term loans cannot be effectively restrain the non-efficiency investment behavior,decreasing the growth of the enterprise.This research empirically tests the fact that whether or not the credit resources can play a good role in corporate governance.The conclusion supply information for our country to profile the allocation efficiency of credit resources.At the same time,this article also enriches the research on the relationship of enterprise investment financing behavior and output in terms of macroeconomic factors.The innovation of this thesis lies in the following two aspects:first,in terms of perspective,this article researches the influence of financing behavior change on enterprise performance in terms of macroeconomic factors but not in term of the micro perspective that analyses the impact of debt financing scale changes on corporate performance;Second,in terms of research contents,I decomposed bank loans of the enterprise according to debt maturity under loose monetary policy environment.Respectively I analysed the influence of increasing short-term bank loans and long-term bank loans on corporate performance.In contrast with previous research,this is an extension in the research content.