The Impact Of Banking Competition On The Financialization Of Entity Enterprises

With the deepening marketization of commercial banks in China,the competition pattern of the banking industry has undergone great changes,and the research on competition in the banking industry has gradually become a hot issue in academic circles.At the same time,the problem of "de-realization" of the real economy has also gradually come to the fore: operators of real enterprises either invest their capital in the financial market and participate in financial business directly,or participate in financial business activities indirectly by purchasing bank financial products,which may lead to insufficient investment in the real sector and serious damage to the operation order of the product market.Under the "new normal" of economic development which emphasizes high level and high quality,this phenomenon has been highly concerned by the industry.So,is there an intrinsic link between banking competition and corporate financialization? If there is an intrinsic link between the two,how does competition in the banking sector affect the financialization of enterprises? Is there a difference in the effect of this influence?In order to answer the above questions,this paper explores the impact of banking competition on the financialization of real firms based on credit rationing and other related theories,using micro real firms as the research object.The paper selects A-share listed non-financial and non-real estate enterprises from 2009-2019 as the research object.After a preliminary analysis of the overall size and structural characteristics of micro enterprises’ financial asset allocation,the paper applies empirical research methods to systematically and comprehensively discuss and empirically test the influence mechanism of banking competition on the degree of financialization of micro real enterprises with the help of mixed OLS model and mediating effect model.It is found that the degree of banking competition is positively related to the degree of financialization of real enterprises.It is suggested that banking competition may direct a large amount of funds to firms with easy access to finance,and managers of these firms prefer to invest low-cost credit funds in high-yielding financial markets due to the low return on real investment.Further research shows that banking competition has less impact on the degree of financialization of real firms among strictly regulated SOEs and real firms with a low share of investment returns,while the degree of financialization of real firms is also relatively less affected by banking competition in regions with higher levels of marketization.In the subsequent mechanism tests,this paper finds that banking competition mainly affects the degree of financialization of real enterprises through influencing the credit maturity structure and the degree of financial mismatch of enterprises.Finally,based on the research,this paper makes suggestions for government departments and real enterprises themselves.