Scholarlink

<p>This paper explores the causal effect of targeted monetary policy, specifically targeted reserve requirement ratio cuts (TRRRCs), on small and micro enterprises (SMEs) during the Covid-19 pandemic in China. Using biannual Chinese firm-level data and a difference-in-difference identification strategy, we find that targeted monetary policy significantly increases SMEs’ loan availability. Mechanism tests show that the policy boosts loan availability by enhancing bank competition and lowering financing costs. Additionally, the positive effects are more pronounced for early-stage SMEs, larger SMEs, SMEs with higher financial constraints, SMEs in less-developed regions, and SMEs in areas with higher bank density. We also find that the policy primarily stimulates SMEs’ long-term loan availability. However, SMEs tend to reduce corporate investment and financial asset investment but use bank credit as a substitute for trade credit to alleviate financial constraints among business partners. Overall, this study highlights the positive impact of targeted monetary policy in reducing SMEs’ financial burdens and provides insights into how such policies affect SMEs’ business decisions during “black swan” events.&#xa0;</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

Targeted monetary policy, SMEs’ loan availability, and corporate investment: evidence from China

  • 期刊论文

  • 发表日期：

    2025年7月11日

查看全文
  • Renzhi Li,
  • Caihong Chen,
  • Zhijie Han,
  • Yuwei Wang

摘要

This paper explores the causal effect of targeted monetary policy, specifically targeted reserve requirement ratio cuts (TRRRCs), on small and micro enterprises (SMEs) during the Covid-19 pandemic in China. Using biannual Chinese firm-level data and a difference-in-difference identification strategy, we find that targeted monetary policy significantly increases SMEs’ loan availability. Mechanism tests show that the policy boosts loan availability by enhancing bank competition and lowering financing costs. Additionally, the positive effects are more pronounced for early-stage SMEs, larger SMEs, SMEs with higher financial constraints, SMEs in less-developed regions, and SMEs in areas with higher bank density. We also find that the policy primarily stimulates SMEs’ long-term loan availability. However, SMEs tend to reduce corporate investment and financial asset investment but use bank credit as a substitute for trade credit to alleviate financial constraints among business partners. Overall, this study highlights the positive impact of targeted monetary policy in reducing SMEs’ financial burdens and provides insights into how such policies affect SMEs’ business decisions during “black swan” events.