Does Banking Competition Alleviate or Worsen Credit Constraints Faced by Small and Medium Enterprises? Evidence from China (Replaced by CentER DP 2012-013)

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

Research output: Working paperDiscussion paperOther research output

Abstract

Banking competition may enhance or hinder the financing of small and medium enterprises (SMEs). Using a survey on the financing of China’s SMEs combined with detailed bank branch information, we investigate how concentration in the local banking market affects the availability of credit. It is found that lower market concentration alleviates financing constraints. The un-concentrated presence of joint stock banks has a larger effect on alleviating credit constraints, while the presence of state-owned banks has a smaller effect, than the presence of city commercial banks.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Volume2011-006
Publication statusPublished - 2011

Publication series

NameCentER Discussion Paper
Volume2011-006

Keywords

  • Banking Competition
  • SMEs Financing
  • Credit Constraints

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