Does Direct Monetary Policy Affect the Supply of Bank Credit to Small and Medium-Sized Enterprises? An Analysis Based on Chinese Data

Ruishi Jiang and Jia Ruan ()
Additional contact information
Ruishi Jiang: School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China
Jia Ruan: School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China

Sustainability, 2023, vol. 15, issue 15, 1-19

Abstract: In order to develop the real economy and solve the problems of enterprise financing and lending, banks should increase their support for SMEs (small and medium-sized enterprises). The People’s Bank of China introduced two direct monetary policy tools in June 2020, which are important for alleviating the financing problems of SMEs, improving the construction of financial support for the real economy and promoting the recovery of economic development. This paper manually collects annual data on the loan balances of SMEs from listed commercial banks in China from 2011 to 2021, and it empirically tests the implementation effects of the direct monetary policy tools using the double-difference model and the moderating effect model. The results of the study indicate that the implementation of the direct monetary policy tools can increase the credit supply of commercial banks to SMEs. The moderating effect of digital inclusive finance on the impact of direct monetary policy on the credit supply of SMEs is not statistically significant for the time being. Therefore, it is necessary to improve the transmission mechanism of structural monetary policy, establish a sustainable development mechanism for digital inclusive finance, and guide commercial banks to improve their capital strength and profitability so that structural monetary policy tools can be most effective.

Keywords: structural monetary policy; supply of bank credit to SMEs; sustainability of SMEs; digital inclusive finance; double-difference model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/15/11674/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/15/11674/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:15:p:11674-:d:1205142

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().