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.
|Place of Publication||Tilburg|
|Publication status||Published - 2011|
|Name||CentER Discussion Paper|
- Banking Competition
- SMEs Financing
- Credit Constraints