 Risking or de-risking? The effect of banking competition on large state-owned banks and small and medium-sized enterprise lending: Evidence from ChinaYunjia Liang, Bo Zhou and Shaoyang Zhao International Review of Financial Analysis, 2024, vol. 94, issue C Abstract: This study examines the effect of the expansion of small and medium-sized bank branches on large state-owned banks in China based on bank branch-level financial data and detailed loan-level data from 2008 to 2015. We find that the expansion of small and medium-sized banks favorably impacts the operating income of large state-owned banks without intensifying bank risk-taking. Large state-owned banks, used to lack competition, expand their total lending scale to achieve more operating revenue by servicing more firms, especially small and medium-sized enterprises (SMEs). This promotes SMEs' access to finance, while also raising the operating costs of large state-owned banks. More importantly, the lending standards and loan quality of large state-owned banks do not deteriorate, implying that they do not employ risky lending tactics to deal with increased competition. Keywords: Banking deregulation; Large state-owned banks; Small and medium-sized banks (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:94:y:2024:i:c:s105752192400190x DOI: 10.1016/j.irfa.2024.103258 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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