Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach
By constructing the dynamic panel model and dynamic threshold model, this paper empirically analyzes the direct impact of monetary policy transmission on deleveraging initiatives of 204 microfinance institutions (MFIs) in China from 2012 to 2021, and the interactive effects of different monetary pol...
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Human Resource Management Academic Research Society
2024
|
| Online Access: | http://psasir.upm.edu.my/id/eprint/117071/ http://psasir.upm.edu.my/id/eprint/117071/1/117071.pdf |
| _version_ | 1848867159110844416 |
|---|---|
| author | Li, Yue Mohd Ashhari, Zariyawati Hisyam Ab Razak, Nazrul Soh, Wei Ni |
| author_facet | Li, Yue Mohd Ashhari, Zariyawati Hisyam Ab Razak, Nazrul Soh, Wei Ni |
| author_sort | Li, Yue |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | By constructing the dynamic panel model and dynamic threshold model, this paper empirically analyzes the direct impact of monetary policy transmission on deleveraging initiatives of 204 microfinance institutions (MFIs) in China from 2012 to 2021, and the interactive effects of different monetary policy tools. The empirical investigations find that: the quantitative monetary policy transmission directs a negative impact on MFIs’ deleveraging, while the direct macro-control of price-based monetary policy tool is not significant. When two monetary policy tools interact, the inhibitory effect of quantitative monetary policy on MFIs’ deleveraging weakens once the price-based monetary policy tightening exceeds the threshold. Additionally, as the endogenous money multiplier amplifies the actual money quantity, price-based monetary policy starts to play its role in stable controllability, and MFIs gradually accept market-oriented interest rate mechanisms to adjust their deleveraging initiatives. The findings herein contribute to the significant implications of the study. The central bank should characterize the quantity control of quantitative monetary policy and the structural control of price-based monetary policy to formulate a scientific monetary policy. By improving the market-oriented interest rate mechanism of microfinance and coordinating with macroprudential regulations, it could achieve micro-prudential guidance on MFIs’ deleveraging progress, as well accelerate economic transition and structural leverage adjustment. |
| first_indexed | 2025-11-15T14:32:04Z |
| format | Article |
| id | upm-117071 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:32:04Z |
| publishDate | 2024 |
| publisher | Human Resource Management Academic Research Society |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1170712025-04-24T02:15:05Z http://psasir.upm.edu.my/id/eprint/117071/ Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach Li, Yue Mohd Ashhari, Zariyawati Hisyam Ab Razak, Nazrul Soh, Wei Ni By constructing the dynamic panel model and dynamic threshold model, this paper empirically analyzes the direct impact of monetary policy transmission on deleveraging initiatives of 204 microfinance institutions (MFIs) in China from 2012 to 2021, and the interactive effects of different monetary policy tools. The empirical investigations find that: the quantitative monetary policy transmission directs a negative impact on MFIs’ deleveraging, while the direct macro-control of price-based monetary policy tool is not significant. When two monetary policy tools interact, the inhibitory effect of quantitative monetary policy on MFIs’ deleveraging weakens once the price-based monetary policy tightening exceeds the threshold. Additionally, as the endogenous money multiplier amplifies the actual money quantity, price-based monetary policy starts to play its role in stable controllability, and MFIs gradually accept market-oriented interest rate mechanisms to adjust their deleveraging initiatives. The findings herein contribute to the significant implications of the study. The central bank should characterize the quantity control of quantitative monetary policy and the structural control of price-based monetary policy to formulate a scientific monetary policy. By improving the market-oriented interest rate mechanism of microfinance and coordinating with macroprudential regulations, it could achieve micro-prudential guidance on MFIs’ deleveraging progress, as well accelerate economic transition and structural leverage adjustment. Human Resource Management Academic Research Society 2024-03-10 Article PeerReviewed text en cc_by_4 http://psasir.upm.edu.my/id/eprint/117071/1/117071.pdf Li, Yue and Mohd Ashhari, Zariyawati and Hisyam Ab Razak, Nazrul and Soh, Wei Ni (2024) Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach. International Journal of Academic Research in Business and Social Sciences, 14 (3). ISSN 2222-6990 https://hrmars.com/index.php/IJARBSS/article/view/20863/Monetary-Policy-and-Deleveraging-of-Microfinance-Institutions-in-China-A-Dynamic-Threshold-Approach 10.6007/ijarbss/v14-i3/20863 |
| spellingShingle | Li, Yue Mohd Ashhari, Zariyawati Hisyam Ab Razak, Nazrul Soh, Wei Ni Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach |
| title | Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach |
| title_full | Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach |
| title_fullStr | Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach |
| title_full_unstemmed | Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach |
| title_short | Monetary policy and deleveraging of microfinance institutions in China: a dynamic threshold approach |
| title_sort | monetary policy and deleveraging of microfinance institutions in china: a dynamic threshold approach |
| url | http://psasir.upm.edu.my/id/eprint/117071/ http://psasir.upm.edu.my/id/eprint/117071/ http://psasir.upm.edu.my/id/eprint/117071/ http://psasir.upm.edu.my/id/eprint/117071/1/117071.pdf |