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An Empirical Study Of Market Structure Of Commercial Banks And Credit Of Small Businesses

Posted on:2013-04-19Degree:DoctorType:Dissertation
Country:ChinaCandidate:J QinFull Text:PDF
GTID:1109330467982735Subject:Business management
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Small businesses are an important part of our national economy, and play an important role in promoting sustained, stable and healthy development of national economy and safeguarding social stability. However, due to lack of funds, the operation failure rate of small businesses is much higher than medium-sized enterprises. With rapid development of private economy and gradual reform of financial system, the efficiency of financial services for medium-sized enterprises has been greatly improved, and the financing difficulties of medium-sized enterprises have been resolved to some extent. But the financing situation of small businesses has not improved, especially in credit difficulties. Domestic and international experience shows that loans from commercial banks and other financial institutions are the most important source of outside financing for small businesses, but commercial banks are reluctant to get involved in credit of small businesses due to profit and avoiding risks. Of course, greater operational risks, smaller asset size, unsound management and opaque information of small businesses are inherent reasons, but lack of small and micro financial institutions and the imperfect commercial bank system are also important reasons. Therefore, to focus on the market structure of commercial banks, to study the impact on credit of small businesses from size, capital source, the nature of property rights, regional structure and the degree of competition of commercial banks, and to found the main factors affecting the credit of small businesses, all these have important theoretical and practical significance for easing credit difficulties of small businesses and promoting development of small businesses, but also provide a useful reference for financial system reform of China. The main research of this dissertation is as followed:(1) An empirical study on scale structure of commercial banks and credit of small businesses. It has classified commercial banks according to asset size, and empirically studied "small bank advantage" and the relationship among the size of banks, lending technologies and credit of small businesses in our credit market. Large and medium-sized banks tend to lend to the transparent firms based on transactions-lending, and smaller banks more likely to lend to opaque firms based on relationship-lending. In addition, there were some correlations between the indicators reflecting financial characteristics of business and scale of the lending bank, businesses got loan from small banks have less lending banks. This shows that the assumption of "small bank advantage"holds in our credit market. Therefore, the development of small banks may be as a way to solve credit difficulties of our small businesses.(2) An empirical study on foreign and domestic commercial banks and small businesses credit. Domestic banks have been assumed as incumbent and foreign banks as entrant. The results of evolutionary game analysis showed that domestic banks generally choose to give up small businesses regardless of their competitive strength, and foreign banks will choose small businesses as their borrowers. On this basis, the impact on the credit level of small businesses exerted by foreign banks when they entered into credit market has been analysed empirically. The results show that the "entry" of foreign banks has a significant impact on the credit of small businesses, and there is quadratic functional relationship between them. With foreign banks entered into and the credit proportion of foreign banks increased, loans supply to small businesses is increased firstly, then gradually decreased after reaching the highest level, even if the credit proportion of foreign banks continued to increase. In view of the credit proportion of foreign banks has been close to the threshold, so to support the development of domestic banks should become an important countermeasure to solve the credit difficulties of small businesses.(3) An empirical study on ownership structure of commercial banks and credit of small businesses. State-owned commercial banks have been assumed as incumbent and non-state-owned commercial banks as entrant. The results of game analysis showed that state-owned banks generally choose to give up small businesses regardless of their competitive strength, and non-state-owned banks will choose small businesses as their borrowers. On this basis, the relationship between non-state-owned banks and credit of small businesses has been studied empirically. The results show that non-state-owned banks have greater effect on the credit availability of small businesses, and the relationship between them could be represented by the quadratic function. When the credit proportion of non-state-owned banks is increased, the credit of small businesses is rising, and then a gradual decrease was appeared in the highest level. So at present, the development of private banks should be persisted until there is excessive competition among private banks, and certain restrictive measures should be taken.(4)An empirical study about transregional operation of city commercial banks and credit of small businesses. A theoretical analysis model has been built to explore the relation between fixed costs of entering new city, the degree of similarity of goods and services provided by commercial banks with the the number of banks. The model suggests that if the return on investment was not considered, the greater fixed costs of entering new city by commercial banks, the less the number of commercial banks entered, and the fixed costs of entering into developed cities are higher than into the underdeveloped city; the products and services provided by commercial banks are more similar, the number of commercial banks in market is more bound. But this conclusion is conflict with the current situation of transregional operation by our city commercial banks, and it suggests that there may be non-rational in transregional operation of our commercial banks. Transregional operation of city commercial banks and credit of small businesses has been analyzed empirically, and the result showed there is an apparent negative correlation between transregional operation time of city commercial banks with credit of small businesses. So the transregional operation of city commercial banks should be adjusted to focus on small and medium-sized cities and serve for small businesses.(5) Commercial banks competition impact on credit of small businesses. An analytic model of commercial banks competition influencing on credit was developed for small businesses, which takes the cost of the entrepreneur switching bank as an measure for bank competition, thinks enterprise investment earnings, probability of project successing, capital advanced for project and variant interest rate which bank set according to the scale of enterprises as the main influencing factors on the credit of small businesses. The result showed that higher bank competition increases bank risk by increased the loan risk of banks, at the same time, the proportion of small businesses loans reduces. It explains higher bank competition is not benefit for increasing credit of small businesses. So the market competition among commercial banks should be control moderately.
Keywords/Search Tags:Market structure of commercial banks, credit of small businesses, scalestructure, ownership structure, transregional operation, bank competition
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