Marketization of Interest Rate and Innovation Output of Listed Firms
WU Chen1, WANG Kedi2
1. Institute of Finance and Development, Nankai University, Tianjin 300071,China; 2. School of Humanities and Social Sciences, Beijing Institute of Technology, Beijing 102488, China
Abstract On September 24, 2013, the loan base rate (Loan Prime Rate,LPR) centralized quotation and issuance mechanism was implemented. In the same year, the People's Bank of China selected nine banks as the first batch of LPR quotation banks to further deepen the market-oriented and independent pricing mechanism of interest rates. This paper takes the implementation of the first batch of LPR centralized quotation banks selected by the People's Bank of China as a quasi natural experiment to test the economic consequences of the impact of interest rate marketization on the innovation behavior of listed companies. Based on the data of A-share listed companies from 2008 to 2017, this paper uses a time-varing DID model and the empirical test finds the following results. (1) The innovation output of listed companies affected by the marketization of interest rate decreases obviously. (2) Considering the difference of enterprise size and risk, it is found that the innovation output of small-scale and high-risk listed companies affected by interest rate marketization is significantly suppressed, but this effect has no effect on large-scale and low-risk listed companies. (3) After the robustness test, further study shows that due to the impact of interest rate marketization, listed companies' innovation financing constraints become tighter, resulting in listed companies to reduce innovation input and thus restrain innovation output. This paper points out that while promoting the marketization of interest rate, we should optimize the financing structure, increase the proportion of direct financing and ease the constraint of innovative financing for improving corporate innovation.
2022, Vol. 39 
