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

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  • Chong, Terence Tai-Leung
  • Lu, Liping
  • Ongena, Steven

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.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Banking & Finance.

Volume (Year): 37 (2013)
Issue (Month): 9 ()
Pages: 3412-3424

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Handle: RePEc:eee:jbfina:v:37:y:2013:i:9:p:3412-3424

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Web page: http://www.elsevier.com/locate/jbf

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Keywords: Banking competition; SME financing; Credit constraints;

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References

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Cited by:
  1. Beck, T.H.L. & Lu, L. & Yang, R., 2013. "Finance and Growth for Microenterprises: Evidence from Rural China," Discussion Paper 2013-053, Tilburg University, Center for Economic Research.
  2. Sylwester Kozak, 2013. "Consolidation of the banking sector in Poland in 1989-2013 in comparison with the structural changes of the banking sector in the USA and the EU," National Bank of Poland Working Papers 166, National Bank of Poland, Economic Institute.

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