Banking Competition,Financing Constraint And Enterprises Innovation

Innovation has become the core for countries to achieve economic re-balancing and build new national competitive advantages.However,innovation financing constraints of the China's enterprise still remain serious,especially for those of small and medium sizes.At the meantime,the degree of banking competition is the key of financial environment factors for this problem.In this paper,the competition of banking is considered as a concentrated reflection of financial ecological environment according to the embedded perspective and the related financial theory.In addition,the influences of the banking competition environment on the financing constraint and enterprise innovation are investigated by employing the multilevel statistical model,in which the data of inter-provincial level of banking competition and microcosmic data of Shanghai and Shenzhen A-share listed companies from 2008 to 2014 are chosen for the analysis.It is found that the financing constraint can significantly inhibit the innovation of enterprises.Moreover,the extent of its effect shows to be regional different,which can be explained by the different competition environment of the banking industry in the regions.When the competition environment of the banking industry in a province is strengthened,the resulting restriction of financing constraint on enterprise innovation is weakened.The possible reason is that the enhancement of the competition environment of the banking industry regulates the effect of financing constraint on the innovation of enterprises and alleviates the financing constraint,which promote the enterprise innovation.By carrying out the robustness test of the measure index of the replacement financing constraint,the conclusions are verified to be still valid.Additionally,more samples,which are classified according to the size and the ownership of the enterprises,were analyzed.It is found that the financing constraint relief effect owing to the banking competition is especially outstanding in large enterprises and non-state-owned enterprises.But this effect shows to remain limited in smaller enterprises,which indicates that although the number of small and medium-sized banks is increasing,it does not fully exploit its advantages in serving small and medium-sized enterprises yet.To this end,several policy suggestions are given as follows:Firstly,increase the proportion of private capital and foreign capital in the banking industry.Secondly,support and promote the development of small and medium-sized banks in the region.Thirdly,establish effective information identification mechanism.and risk control mechanism.Fourthly,develop multilevel capital market.