The Mechanism Of Inflation Expectation Affecting Banking Credit Of Enterprises

Inflation expectations have been an important topic of theoretical and practical concern.Inflation expectations directly affect micro-enterprise production and operation decisions,especially debt financing decisions.Bank loans are the main financing channel for Chinese companies,so studying inflation expectations has certain significance for corporate bank loans.This paper attempts to explore the impact mechanism of inflation expectations on corporate bank loans.First,the paper theoretically analyzes two possible theoretical mechanisms of inflation expectations affecting corporate bank loans,inventory costs and real interest rates.The analysis believes that inflation expectations affect the company's inventory cost expectations,affecting its inventory holding expectations,affecting its financing needs,which in turn affects its bank loans;inflation expectations affect the company's actual loan cost expectations,which in turn affects its bank loans.Secondly,the paper selects the non-financial listed companies of the A-shares from 2006 to 2016 as an example for empirical testing.The basic ideas are:(1)using the VAR model with additional forward-looking variables(actual inflation rate,M2 growth rate,GDP output gap),estimated PPI inflation expectations and CPI inflation expectations,corresponding to inflation expectations and general inflation in the production sector.(2)Panel regression analysis of CPI inflation expectations and PPI inflation expectations of enterprises respectively.It is found that PPI inflation expectations significantly affect corporate bank loans,such as the increase in bank loans to the lag of PPI inflation expectations.The regression coefficient was 0.014,which was significant at a significant level of 1%;however,empirical evidence failed to show that CPI inflation expectations affect corporate bank loans.Therefore,the empirical description of the possible establishment of the inventory cost mechanism is not sufficient to illustrate the establishment of the effective interest rate mechanism.Finally,the paper uses the three-stage test method of mediation to further verify the inventory cost mechanism.The paper selects the inventory holding level as the intermediary mechanism variable,and empirically finds that the PPI inflation expectation significantly affects the change in inventory holding level,and the change in inventory holding level significantly affects the bank loan of the enterprise.The conclusion is still established after controlling factors such as enterprise size,mortgage capacity,non-debt tax shield,and profitability.The different measures of bank loans were selected for robust testing,and the conclusions were consistent.In summary,inflation expectations significantly affect corporate bank lending through the inventory cost mechanism.The inflation expectation coefficient is significantly positive,which means that when the company expects inflation to rise,considering the increase in inventory costs in the future,it tends to borrow money from banks in advance to avoid raw material price risks.The main contribution of the paper is to provide direct empirical evidence on the impact mechanism of inflation expectations on corporate bank loan financing,especially the “inventory cost” mechanism.The paper has a certain marginal contribution to the literature on inflation expectations and corporate micro-behavior.