Shilei Huang;

• 1:School of Big Data and Statistics
• 2: Anhui University

Abstract：

Monetary policy uncertainty represents the implicit costs for monetary policy adjustment. With the extensive margin perspective, this study focuses on how monetary policy uncertainty affects new firm entry through the real options and financial friction channels. Using a regime-switch model with stochastic volatility to measure the monetary policy uncertainty in China and using the Chinese Industrial Enterprises Database to measure the new firm entry rate at the city-industry-year level, the empirical results show that the monetary policy uncertainty significantly inhibits the new firm entry, the result is robust to endogeneity test and robustness tests. The real option mechanism and the financial friction mechanism are effective transmission channels that monetary policy uncertainty inhibits the new firm entry. From the real options theory perspective, the inhibitory effect is more pronounced in industries with higher asset irreversibility or lower entry barriers. Further, extending the real options theory from the risk perception perspective, the results show that improvement in the macroeconomic environment weakens the inhibitory effect, and perceived uncertainty magnifies the inhibitory effect. From the financial frictions theory, the results show that the macro credit resources availability and the regional financial development mitigate the inhibitory effect. Further, using the ownership type to proxy for financial constraints, the result shows that the inhibitory effect is stronger among non-state firms. The study enriches the understanding of the extensive marginal effect of monetary policy uncertainty, and has important implications for preventing and resolving risks and optimizing monetary policy operation.

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Authors: Shilei Huang;

References：

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• (1)经济金融因素包括:各省人均国内生产总值对数(2000年不变价)、居民消费价格指数、产业结构(第二产业比重和第三产业比重)、城镇化率(城镇人口比例)、金融发展程度(金融机构年末存款余额与国内生产总值比值和金融机构年末贷款余额与国内生产总值比值)、公共基础设施(公路里程与区域面积比值)、固定资产投资(全社会固定资产投资对数2000年不变价)、公共财政支出(地方财政支出与国内生产总值比重)、人均储蓄(人均城乡储蓄存款2000年不变价);社会人口因素包括:人口死亡率、老年抚养比、少儿抚养比、平均家庭人口规模、教育水平(普通高校在校学生数对数)、城镇居民基本医疗保险基金支出2000年不变价对数值。 (2)限于篇幅,稳健性检验结果未报告,备索。 (3)刘贯春等(2019)行业资产可逆性排名倒序的10个行业是畜牧业、渔业、燃气生产和供应业、纺织业、农业、卫生业、餐饮业、林业、木材加工及木、竹、藤、棕、草制品业、家具制造业,本文结果与之类似。