European Banking Center Discussion Paper No. 2012-007
51 Pages Posted: 13 Feb 2011 Last revised: 10 Dec 2014
Date Written: April 4, 2013
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, SMEs Financing, Credit Constraints
JEL Classification: D41, D43, G21
Suggested Citation: Suggested Citation
Chong, Terence Tai-Leung and Lu, Liping and Ongena, Steven, Does Banking Competition Alleviate or Worsen Credit Constraints Faced by Small- and Medium-Sized Enterprises? Evidence from China (April 4, 2013). European Banking Center Discussion Paper No. 2012-007. Available at SSRN: https://ssrn.com/abstract=1759864 or http://dx.doi.org/10.2139/ssrn.1759864