Prospective Guidance Of Monetary Policy,financing Decisions And Speed Of Capital Structure Adjustment

After the financial crisis,the leverage ratio of all sectors in China has risen rapidly,and the "deleveraging" cannot be delayed.In 2015,the central government put forward the supply side structural reform task of "three elimination,one reduction and one compensation",in which "deleveraging" is the key to the five tasks.In 2022,the Central Economic Work Conference also pointed out that economic work should be at the top of the agenda and progress should be made while maintaining stability.Macroeconomic policies should be stable and effective,so as to enhance the endogenous momentum of development,maintain the continuous decline of macro leverage,and create space for future monetary policy.Under the background of the new normal of economy,the environment faced by the adjustment and decisionmaking of enterprise capital structure is often complex and changeable.On the one hand,it is determined by some characteristic factors of the enterprise itself;on the other hand,it is often affected by the overall macroeconomic situation and regulated by national macroeconomic policies.Among them,forward-looking guidance,as an unconventional monetary policy of the Central Bank,will affect the expectations of enterprise management,and thus affect the production and operation activities of enterprises.Therefore,forward-looking guidance may affect the capital structure adjustment of enterprises by influencing the financing decisions of enterprises.In view of this,under the theoretical analysis of "forward-looking guidance of monetary policy-financing decision-dynamic adjustment of capital structure",this paper uses the annual report data of listed companies in Shanghai and Shenzhen Stock Exchanges of China from 2007 to 2020 to build a logical framework based on the target financing model to explain that the forward-looking guidance of monetary policy affects the speed of enterprise capital structure adjustment through financing decision.Through theoretical analysis and empirical research,this paper draws the following conclusions:(1)Based on the target financing model,this paper measures the speed of capital structure adjustment of listed companies under mechanical adjustment and active adjustment,and finds that the speed of capital structure adjustment of Chinese listed companies under active adjustment is 14.9%,more than twice that under random financing(6.1%).(2)The looser the monetary policy information released by the forward-looking guidance,the faster the enterprise’s capital structure will be adjusted.According to enterprise financing decisions,enterprises are divided into six types of samples: equity financing,non equity financing,debt financing,non debt financing,equity debt financing and non equity debt financing.The test results are consistent with the overall sample.(3)The forward-looking guidance of monetary policy will promote the issuance of enterprise equity and debt by influencing the financing decisions of enterprises,thus promoting the dynamic adjustment of enterprise leverage.(4)Under the heterogeneous perspective of enterprise nature,enterprise scale,profitability,etc.,the impact of the forward-looking guidance of monetary policy on enterprise SOA is different.At the same time,the forward-looking guidance and enterprise characteristics jointly affect the financing decisions and dynamic adjustment of capital structure of enterprises.The innovation of this paper lies in:(1)The traditional local adjustment model ignores the adjustment impact of the mechanical mean regression of leverage and the active financing decision,and only focuses on the evolution of total leverage.Therefore,in order to overcome the shortcomings of the local adjustment model,this paper uses the research of Maroney et al.(2)In the study of SOA,most of the literature related to enterprise characteristics and macroeconomic factors,but there is a lack of attention to forward-looking guidance.Based on the dynamic trade-off theory,this paper examines the dynamic adjustment of capital structure of Chinese listed companies from the perspective of two forms of forward-looking guidance to explore the impact of the forward-looking guidance of monetary policy on the speed of enterprise capital structure adjustment,It is helpful to more comprehensively understand the logic behind the forward-looking guidance of monetary policy and the dynamic adjustment of corporate leverage.(3)Under the framework of forwardlooking guidance and dynamic adjustment of enterprise leverage,this paper systematically examines the intermediary effect of financing decisions.The existing research mainly focuses on the estimation of adjustment cost,adjustment speed and its influencing factors,and fails to reflect the explanatory power of financing decisions.