Research On The Impact Of Banking Market Structure On Financing Constraints Of Small And Medium-sized Enterprises

With the reform and development of China’s economy,Small and medium enterprises(SMEs)become the main driving force for innovation in the economic transformation,which make great contribution to the national economy.However,due to the information asymmetry,SMEs can not get the external funds to meet the needs of development,in which the acquisition of bank loans is the key to the development of SMEs.With the continuous reform of interest rate liberalization and banking market structure,the banking market structure has undergone significant changes.The paper explores the influence of the banking market structure on the financing constraints of small and medium-sized enterprises,and provides some theoretical analysis for the optimization of the banking market structure and the breakthrough of SMEs financing constraints.After reviewing the domestic and foreign literature,the paper introduces the market structure of China’s banking market structure and the financing situation of SMEs,and then makes theoretical analysis of the mechanism of banking market structure on financing constraints of SMEs from the two dimensions of banking concentration and banking scale structure.The paper makes the empirical analysis of companies on the SMEs board from 2006-2015 by the cash-cash flow sensitivity model to carry out empirical tests through the multiple regression method.We find that lower market concentration alleviates financing constraints.The widespread presence of city commercial banks has a larger effect on alleviating these constraints,than the presence of joint-stock banks,while the presence of state-owned banks has a smaller effect.In order to support SMEs in emerging economics of China,a policy implication is to promote regional banks which have both the business orientation toward SMEs and the proper regional diversification.