Can The Interest Rate Liberalization Ease The Problem Of Firm Financing Constraints?

The problem of corporate finance constraints has always been a worldwide problem.However,because of the special political and economic environment of Chinese financial market,the problem of corporate financing constraint is complicated.The main reason for the emergence of financing constraints in the Chinese financial market are the market is an emerging market and the interest rate liberalization policies are just implemented for a very short period.Listed companies play an important role in the process of macroeconomic development.The financing constraints of these companies directly affect the development of Chinese market economy.The interest rate liberalization began in our country in 1986,and after 30 years of progressive implementation,the reform has achieved initial success,in this case,it makes significant senses to study the effect that interest rate liberalization made on the problems of financing constraints of the Chinese listed companies.The main contents of this paper will be introduced as follows: firstly,combining with the well-developed theories and the research of domestic and foreign literature,and analyzing the causes of corporate financing constraints and the experience of interest rates liberalization in different countries,and based on the present situation of Chinesefinancial market,constructing some basic assumptions.And then deeply explore the process of Chinese interest rate liberalization reform,focusing on the major events in the process of reform and its effect,and based on domestic and foreign literature,the use of positive cumulative value method to develop the interest rate liberalization index.After that,use the OLS regression model and the investment-cash flows model,based on panel data of Shanghai and Shenzhen 300 enterprises during the period of 2007-2016,the role of marketization of interest rate in the process of corporate breakthrough financing is studied,and the empirical results are verified by Chow Test.The results show that the problem of financing constraints iscommonduring Chinese listed companies,and the financing constraints of sample enterprises will be mitigated with the progress of interest rate liberalization.The results of Chow Test also come to similar conclusions.In the later stage of interest rate liberalization reform,the degree of financial constraints of listed companies is lighter than that in the previous period.The results also show that the financing constraints of non-state-owned enterprises are more serious than those of state-owned enterprises,but the interest rate liberalization reform has less impact on the non-state-owned enterprises.Therefore,the financing constraints of non-state enterprises should be focused in the future development of Chinese market economy,the government should continue to promote interest rate liberalization reform,accelerate the development of financial markets.At the same time,it is necessary to strengthen the credit support to non-state enterprises,reduce their dependence on internal financing,andease their financing pressure.