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Bank concentration and sectoral growth: Evidence from Chinese provinces

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  • Diallo, Boubacar
  • Zhang, Qi

Abstract

This paper studies the relationship between bank concentration and economic growth in China. It uses panel data for 31 provinces and 8 different sectors over the period 2001–2013. Using two-stage least squares regressions, we find that bank concentration negatively and significantly impacts sectoral growth for Chinese provinces. This finding has relevant policy implication for policy-makers and academics since it suggests that the low level of bank concentration in the Chinese financial sector promotes economic growth, a finding that this is highly relevant in this period of economic slowdown.

Suggested Citation

  • Diallo, Boubacar & Zhang, Qi, 2017. "Bank concentration and sectoral growth: Evidence from Chinese provinces," Economics Letters, Elsevier, vol. 154(C), pages 77-80.
    • Handle: RePEc:eee:ecolet:v:154:y:2017:i:c:p:77-80
    DOI: 10.1016/j.econlet.2017.02.013
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    References listed on IDEAS

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    Cited by:

    1. Diallo, Boubacar, 2017. "Corporate governance, bank concentration and economic growth," Emerging Markets Review, Elsevier, vol. 32(C), pages 28-37.
    2. Mittal, Amit & Garg, Ajay Kumar, 2021. "Bank stocks inform higher growth—A System GMM analysis of ten emerging markets in Asia," The Quarterly Review of Economics and Finance, Elsevier, vol. 79(C), pages 210-220.
    3. Cañón, Carlos & Cortés, Edgar & Guerrero, Rodolfo, 2022. "Bank competition and the price of credit: Evidence using Mexican loan-level data," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 56-74.
    4. Mittal, Amit & Garg, Ajay Kumar, 2018. "Bank stocks inform higher growth – A System GMM analysis of ten emerging markets in Asia," MPRA Paper 98253, University Library of Munich, Germany.
    5. Dia, Enzo & Jiang, Lunan & Menna, Lorenzo & Zhang, Lin, 2023. "Interest margins, lending rates and bank productivity among Chinese provinces," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 104-127.
    6. Enzo Dia & Lunan Jiang & Lorenzo Menna & Lin Zhang, 2018. "Common Banking across Heterogenous Regions," CFDS Discussion Paper Series 2018/2, Center for Financial Development and Stability at Henan University, Kaifeng, Henan, China.

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    More about this item

    Keywords

    Economic growth; Bank concentration; China;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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