ZHU Jingjing,etc:Does the Banking Market Structure Affect Enterprises Credit Constraints in China?

Abstract：Based on a survey data of World Bank on Chinas enterprises, this paper investigates the effect of banking market structure on enterprise credit constraints after financial crisis, using Probit model and IV methods.We find that: (1) overall, the banking market competition eases obstacles to obtaining finance; (2)this impact is different for enterprises of small, medium, and large sizes.Bank loan competition focuses on medium and large enterprises.However, for small enterprises, banking market structures impact is not significantly which is different from previous studies.Moreover, the paper also discusses the mechanism of banking market structure after we divide the enterprise sample into bank credit constraints and self credit constraints.We also find that the banking market competition reduces enterprises self credit constraints caused by “complex application procedures were complex,” “unfavorable interest rates,” and “high collateral requirements”, but it doesnt affect the credit caused by banks credit approval decision.

Key words： Banking Market Structure    Credit Constraints    Enterprise Size

source:Finance & Trade Economics ,No.10,2015