Impact of monetary policy on corporate R&D investment: From the perspective of loan term structure

Abstract Monetary policy can directly impact corporate R&D investment, and it can also be achieved through loan term structure indirectly. This study examines the relationship between macro‐level monetary policy and micro‐level corporate R&D investment from the perspective of loan term structure using data from A‐share listed companies in China from 2007 to 2018. The study has three major findings: (i) There is a positive correlation between monetary policy easing and corporate R&D investment. (ii) From the perspective of the loan term structure, when monetary policy tightens, changes in the loan term structure may discourage corporate R&D activities, which is more pronounced for non‐state‐owned, high‐tech and growth‐stage companies. The effect of unconventional monetary policy is greater than that of conventional monetary policy in the period of severe economic shock, and monetary policy has a clear asymmetric effect that is greater when it is tight than when it is accommodative. (iii) Through survival analysis, it is found that tight monetary policy is not conducive to prolonging the duration of enterprises' R&D investment. Based on these findings, the study presents recommendations that provide a reference for the government to implement macro‐control.