A Study On Relation Between Banking Market Structure And Information Production

When China's economic transition goes further, the contribution made by small and medium-sized enterprises tends to be more and more obvious. On the other side, the financing difficulties have turned to be the main obstacle to the development of small and medium-sized enterprises. Small and medium-sized enterprises in China are born with the nature of labor-intensive, which restricted them to get external financing from nowhere but the commercial banks. To mitigate the financing difficulties of small and medium-sized enterprises, problems lie in the information production of banks have to be solved. Meanwhile, along with the severer competition, the market structure of domestic banking industry and the organization of banks undergoes considerable changes. This paper tried to study the interrelations among banking market structure, information production and the financing availability in the framework of a banking market structure and information production model. Furthermore, an empirical model was designed to test some conclusions made in the theoretic model, the empirical results are also analyzed and explained with related economic practices. In the last part, the policy advices to establish a reasonable banking market structure are provided.