Does Banking Competition Alleviate or Worsen Credit Constraints Faced by Small and Medium Enterprises? Evidence from China (Replaces EBC DP 2011-001)

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

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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
Number of pages56
Publication statusPublished - 2012

Publication series

NameEBC Discussion Paper



  • Banking Competition
  • SMEs Financing
  • Credit Constraints

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