Does banking competition alleviate or worsen credit constraints faced by small- and medium-sized enterprises? Evidence from China

Terence Tai Leung Chong, Liping Lu and Steven Ongena

Journal of Banking & Finance, 2013, vol. 37, issue 9, 3412-3424

Abstract: Banking competition may enhance or hinder the financing of small and medium-sized enterprises. Using a survey on the financing of such enterprises in China, combined with detailed bank branch information, we investigate how concentration in local banking market affects the availability of credit. We find that lower market concentration alleviates financing constraints. The widespread presence of joint-stock banks has a larger effect on alleviating these constraints, than the presence of city commercial banks, while the presence of state-owned banks has a smaller effect.

Keywords: Banking competition; SME financing; Credit constraints (search for similar items in EconPapers)
JEL-codes: D41 D43 G21 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (176)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:37:y:2013:i:9:p:3412-3424

DOI: 10.1016/j.jbankfin.2013.05.006

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