Research On The Influence Of Inflation Expectation On Inventory Adjustment Behavior Of Enterprises

Inflation is an important macroeconomic phenomenon,and its existence will have an important impact on economic growth and investment(Barro,1995,1996;Andres and Hernando,1999),which then affects the pattern of benefit distribution in the macro economy and the distribution of national wealth.At the micro level,inflation expectations affect business decisions.Inventory is an important part of an enterprise's current assets.Maintaining a reasonable inventory level has an important impact on the survival and development of an enterprise.Reasonable management of inventory and realization of inventory optimization can increase the inflow of economic benefits;On the contrary,inventory overstocking will affect the turnover of funds,and may produce impairment losses,excessive storage costs,etc.,while insufficient inventory will make enterprises miss sales opportunities or even lose their market shares,which will have a particularly adverse impact on enterprise performance.In the case of inventories,the change in expected inflation rate is likely to affect macroeconomic uncertainty(Bekaert and Wang,2010;Lin,2009),asset prices(Erb and Harvey,2006)and real interest rates(Ritter and Warr,2002)then exert influences on enterprise inventory management decisions.Research on inflation at home and abroad gradually extends from the macro level to the micro level of enterprises.By studying the impact of inflation on enterprise behavior,we can better understand the impact of macroeconomic phenomena on the real economy.Enterprises' inventory adjustment mechanism has high flexibility and timeliness(Carpenteret al.,1994),so enterprises are more likely to make appropriate inventory adjustment in the face of expected inflation fluctuations.In conclusion,from the perspective of enterprise inventory,this paper discusses the impact of expected inflation on the inventory adjustment behavior of enterprises,and studies whether the inventory adjustment of enterprises with different characteristics is different or not from the perspective of industry classification and enterprise heterogeneity.Furthermore,this paper USES the multiple linear regression model with interactive terms to empirically test the economic consequences of the inventory adjustment to the expected inflation rate.This article selects the first quarter of 2006 to the first quarter of 2018 listed companies as research samples,through the theoretical analysis and empirical test,the study concluded that:(1)inflation expectations will impact on enterprise's inventory adjustment behavior,expected inflation rate rises,the future price level rose,the enterprise in order to improve the production planning and lock the inventory cost in advance,in the current increase the level of inventory held.(2)from the point of industry classification,inflation people nominal wages rise,because the "money illusion" people will improve the level of consumption,cyclical industries because of its high income elasticity,in response to future people rising consumer demand and lock the inventory cost in advance,in the current significantly increase their stock holdings,so the cyclical industry inventory adjustment for inflation expectations are more sensitive;Defensive sectors,by contrast,are concentrated in necessities and utilities,with less income elasticity and inventory adjustments that are not sensitive to inflation expectations.(3)the cyclical industries,in the nature of the property level,although the state-owned enterprises can more easily get bank loans in order to obtain money increase inventory needs,but the non-state enterprise due to its corporate governance to be more perfect,more accurate expectations of future inflation,adjust inventory holding,so for the adjustment of inventory to a greater extent than non-state-owned enterprises the level of inventory adjustment of state-owned enterprises;In terms of enterprise scale,large-scale enterprises are better than small-scale enterprises in terms of financing channels and corporate governance.Therefore,large-scale enterprises take the initiative to make inventory adjustment in accordance with inflation expectations,while small-scale enterprises are not sensitive to inflation expectations.At the corporate debt level,because of the influence of the financing ability and management ability,asset-liability ratio concentration between 50-100%of enterprises at the same time of strong financing ability has a strong ability of management,so will be active to make inventory adjustment according to the inflation expectations,the asset-liability ratio is lower than 50%and higher than 100%of its inventory adjustment is not sensitive to inflation expectations.(4)the rise in expected inflation,as a result of future sales commodity prices rising at the same time people because "money illusion" improve the level of consumption in order to increase the consumption of the goods,as well as enterprises increase inventory ahead of lock in the lower inventory purchase and production costs,so companies expected to future inflation,in the current period to increase its inventory holding will brings to the enterprise future operating performance.Above all,there are some suggestions first,enterprises should fully consider the impact of inflation expectations on inventories and reasonably determine their inventory holding level.Second,while the government takes measures to ease the financing constraints of enterprises,small-scale enterprises should improve their operation and management capabilities,improve the enterprise management system,pay more attention to expected inflation,and improve the efficiency of capital allocation.Third,the target rate of inflation is the central government department management important intermediary indicator of economic fluctuation,and the formation of the actual inflation rate depends not only on the government regulation and control policy,individuals are also depends on the regulation policy response,so the government should take micro-individual inflation expectations into account when regulating inflation,in order to make the regulation policy goals more accuratly.