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Does Banking Competition Alleviate or Worsen Credit Constraints Faced by Small and Medium Enterprises? Evidence from China (Replaces CentER DP 2011-006)

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  • Chong, T.T.L.
  • Lu, L.
  • Ongena, S.

    (Tilburg University, Center for Economic Research)

Abstract

Abstract: Banking competition may enhance or hinder the financing of small and medium 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. (83 words)

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2012-013.

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Date of creation: 2012
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Handle: RePEc:dgr:kubcen:2012013

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Keywords: Banking Competition; SMEs Financing; Credit Constraints;

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