The Nature of Shareholder and the Effectiveness of Monetary Policy Transmission
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| Title | The Nature of Shareholder and the Effectiveness of Monetary Policy Transmission
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| Author | Yizhong Wang Frank Song and Lianfa Li |
| Organization | School of Economics , Zhejiang University；School of Economics and Finance, University of Hong Kong and School of Economics, Peking University；School of Economics, Peking University |
| Email | fmsong@econ.hku.hk |
| Key Words | Monetary Policy；The Nature of Shareholders；The Reformation of Interest Rates Liberalization |
| Abstract | Based on China's particular operation on monetary policy, this paper establishes the hypothesis of differences in the nature of of shareholders how to influence the effect of monetary policy transmission and uses Chinese listed companies’ data to conduct empirical analysis. The findings showed that during the entire sample period, monetary policy changes will impact on corporate investment behavior, and the nature of shareholders does not affect the transmission effects of quantitative monetary policy, but do will affect the price-based monetary policy transmission. However, considering the monetary policy cycle, we found that the nature of shareholder will affect transmission effects of monetary policy in the tightening cycle, but does not affect transmission effects in the expansionary policy cycle. Meanwhile, the liquidity, the size, the ratio to asset liability of companies will limit the effectiveness of monetary policy. The lesson is: the optimization of governance structure in micro fields should be prior to the reformation of interest rates liberalization; we should focus on the use of demand-oriented monetary policy. |
| Serial Number | WP304 |
| Time | 2012-07-13 |
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