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

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

Research output: Working paperDiscussion paperOther research output

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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)
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages56
Volume2012-013
Publication statusPublished - 2012

Publication series

NameCentER Discussion Paper
Volume2012-013

Fingerprint

Financing
Credit constraints
China
Small and medium-sized enterprises
Banking competition
Bank branches
Financing constraints
Market concentration
Commercial banks
Banking
State-owned banks
Credit

Keywords

  • Banking Competition
  • SMEs Financing
  • Credit Constraints

Cite this

Chong, T. T. L., Lu, L., & Ongena, S. (2012). Does Banking Competition Alleviate or Worsen Credit Constraints Faced by Small and Medium Enterprises? Evidence from China (Replaces CentER DP 2011-006). (CentER Discussion Paper; Vol. 2012-013). Tilburg: Finance.
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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). / Chong, T.T.L.; Lu, L.; Ongena, S.

Tilburg : Finance, 2012. (CentER Discussion Paper; Vol. 2012-013).

Research output: Working paperDiscussion paperOther research output

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N2 - 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)

AB - 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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KW - SMEs Financing

KW - Credit Constraints

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

PB - Finance

CY - Tilburg

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