Strategic Positioning, Monetary Policy and Capital Structure

Abstract

Taking Shanghai and Shenzhen A-share non-financial listed companies from 2009 to 2018 as samples, the paper empirically examines the impact of strategic positioning on capital structure decision-making. The results show that firms with more radical strategies are more likely to choose higher capital structure, and the conclusions are still robust after the endogenous problems are alleviated by regression of instrumental variables; under loose monetary policy, the impact is more significant; after distinguishing between state-owned enterprises and private enterprises, the study finds that in the sample of state-owned enterprises, the higher leverage decision-making of the firms with more radical strategies is more significant.