The Effectiveness and Industry Heterogeneity of China’s Monetary Policy

Hengnuo Wang ()
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Hengnuo Wang: The Chinese University of Hong Kong, Business School

A chapter in Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025), 2025, pp 4-13 from Springer

Abstract: Abstract Despite the ongoing easing of monetary policy in China over the last few years, economic development has not been as fast as expected, and the effectiveness of monetary policy has been questioned. However, some studies have verified that monetary policy is effective for some industries. Therefore, this article uses the panel regression model and group regression methods to empirically test the effectiveness and industry heterogeneity of China’s monetary policy. The full sample regression results show that monetary policy works well in affecting the investment of Chinese listed firms. The results of group regression indicate that monetary policy has no significant impact on corporate investment in five industries: transportation, storage and postal services, accommodation and catering, real estate, health and social work, and culture, sports, and entertainment. This article speculates the reasons for the failure of monetary policy in these five industries and recommends that the People’s Bank of China launch more targeted structural monetary policies.

Keywords: monetary policy; effectiveness; industry heterogeneity (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-835-6_2

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DOI: 10.2991/978-94-6463-835-6_2

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