Research On The Impact Of Inflation Expectations On Corporate Leverage

In recent years,the combination of macroeconomic factors and micro-enterprise behaviors is an important developing direction of current research.As an ex-ante judgment,expected inflation is an important macroeconomic factor affecting business decision-making,especially the choice of leverage ratio.This paper selects the data of Shanghai and Shenzhen listed companies from the first quarter of 2010 to the second quarter of 2018 as a research sample to study the effect of expected inflation on leverage ratio.Fristly,this paper reviews the relevant literature on inflation expectations and corporate leverage.On the basis of relevant theoretical review and analysis of the capital structure and inflation,this paper puts forward the hypothesis of "Inverted-U shaped relationship".In the initial stage,when the current company expects the future inflation rate to rise,the leverage ratio of the enterprise will rise,but when the expected inflation is too high,the enterprise will reduce the leverage ratio accordingly.Next,an empirical analysis is carried out.Based on the future price expectation index in the questionnaire published by the People's Bank of China,this paper uses rolling regression to predict the expected inflation rate.Finally,controlling the quarterly,industrial effects and clusters,the panel data fixed effect model regression is performed.The empirical regression shows that there is a significant "inverted U-shaped"relationship between expected inflation and leverage.For state-owned enterprises and non-state-owned enterprises,the expected inflation has a significant positive effect on leverage ratio,however,the "inverted U-shaped" relationship is more significant in state-owned enterprises,but not in non-state-owned enterprises.For high-growth companies and low-growth companies,the expected inflation has a significant positive effect on leverage ratio,however,the "inverted U-shaped" relationship is more significant in low-growth companies,but not in high-growth companies.For large-size companies,the expected inflation has a significant positive effect on leverage ratio and the "inverted U-type" relationship is also significant,which is not significant in small-size companies.Finally,the relevant policy recommendations and prospects are presented.