Monetary Policy,Excess Bank Loans And Investment Efficiency

Investment activities are one of the most critical financial decisions for Chinese companies and are the driving force for the creation of corporate equity values.The efficiency of corporate investment directly determines the performance of the company,which in turn changes the value of the company.With the rapid development of China's economy,the scale of investment has become one of the important factors driving China's economic development.However,the expansion of corporate investment has not brought about a significant increase in corporate investment efficiency.Hence,it is evident that the improvement of investment efficiency has become one of the key concerns of the academic and practical circles in China.The level of corporate investment efficiency is not only affected by the internal governance environment,but also by the macroeconomic environment.As an important means of national macro-control,monetary policy influences the degree of financing constraints of enterprises,and in turn affects the investment efficiency of enterprises.There is no doubt that bank loans are one of the most important external financing channels for listed companies in China.Then the deviation between the actual bank loans of the company and its own optimal proportion of bank loans,i.e.excess bank loans,will ultimately affect the investment efficiency of the company.Therefore,it is extremely meaningful in theory and practice to explore the relationship between monetary policy,excess bank loans and investment efficiency.Based on the previous studies of other scholars,the paper selects the all A-share listed company from 2011 to 2016 as the sample and examines the relationship between monetary policy,excess bank loans and investment efficiency.The results of this study show that there is a significant negative correlation between monetary policy and the investment efficiency of listed company.In other words,compared the loose period of monetary policy,in the tight period of monetary policy,the investment efficiency of listed companies will improve.And the level of the investment efficiency of listed company is more significant in the companies which have the excess bank loans.Further,the paper divides the sample firms into two categories according to the degree of tightness of the monetary policy and examines the relationship between the excess bank loans and the investment efficiency in two different periods of monetary policy.The empirical results show that the positive correlation between the excess bank loans and the investment efficiency will not be the same significant in a company in the tight period of monetary policy than a company in the loose period of monetary policy.