Research On The Impact Of Banking Competition On Corporate Investment

At present,the world economic is in the critical period of deep adjustment.Under the background of the uncertainty and instability of the external environment,how to realize the quality and efficiency of Chinese enterprises' investment more effectively,enhance their comprehensive strength and international competitiveness,become an important discussion that needs to be paid attention to and solved in the process of building a new development pattern with the construction of domestic big cycle.The development of enterprise investment activities needs not only strong support,but also the improvement of external financing environment.This also puts forward the necessary requirements for the improvement of the relationship between financial development and real economy.In fact,it has been a hot topic in the academic circles that the financial sector serves the development of the real economy.The scope of researches ranges from whether financial development can help to improve economic growth to how the banking system affects the value-added of micro entities.However,under the shackles of China's long-term planned economic development,the financial system has the problems with low efficiency and repressions,which makes the financial system dominated by large state-owned banks unable to meet the needs of the current deep adjustment of the global and transformation and upgrading of the domestic.Therefore,after the reform and opening,along with the deepening of Chinese interest rate marketization reform process,the phenomenon has been effectively improved.Chinese banking system is undergoing a transformation from a high degree of monopoly to an increasing degree of competition.Whether the property rights or the scale and quantity,the banking is gradually showing more and more fierce market competition,the monopoly power of large state-owned commercial banks has declined significantly,and the market share of non-state-owned commercial banks has continued to rise.The increasing banking competition not only directly affects the financing constraints faced by real enterprises,but also has an important impact on the corporate investment activities.Based on this,the study focuses on the internal relationship between the banking competition and the investment of the enterprises,aiming to explore the following three key issues:(1)Does the banking competition affect the investment scales of the enterprise? What are the impact mechanisms?(2)Because of the imperfect market,asymmetric information and imperfect internal governance structure,the enterprises are often faced with the behavior of insufficient investment or over investment,which all lead to the loss of investment efficiency.Does the competition of banking improve the inefficient behavior?(3)From the perspective of the object of investment,the capital investment of enterprises cannot achieve the natural optimization of the structure under the condition of perfect market equilibrium in the new classical.And does the competition of banking affect the adjustment of investment structure of enterprises?Based on the review of the previous relevant basic theories and research literatures,the study focuses on the relationship between banking competition and enterprise investment,constructs a theoretical analysis framework,and studies the internal mechanism of banking competition affecting enterprise investment from two aspects:the financing and governance functions of the loans;through the analysis of the main inefficiency investment of different types of enterprises.The paper analyzes the internal logic of the competition of banking to promote the efficiency of investment.Finally,under the imbalance of enterprises' investment structure,the paper analyzes the influence effect of banking competition on different capital investment direction and the improvement of structural efficiency.Lastly,the paper analyzes the influence of banking competition on investment scales,efficiency and structure adjustment by econometric model,and puts forward a series of countermeasures.The main conclusions are as follows:(1)Under the deregulation of banking market,banking competition promotes the expansion of enterprise investment scale and weakens the institutional discrimination and scale discrimination of credit allocation to a certain extent by easing the financing constraints of enterprises,strengthening the role of debt governance,improving the availability of enterprise credit,and reducing the agency cost of enterprises.(2)According to the Vogt' model,state-owned and largescale enterprises in China are over invested,while private and small-scale enterprises are under invested.The reason for inefficient investment of different enterprises is that financing constraints and agency conflicts play different roles in heterogeneous enterprises.Banking competition can promote the efficiency of enterprises by acting on financing constraints and agency conflicts.(3)There are differences in the investment structure of different types of Chinese enterprises.Overall,they tend to hold fixed assets investment,while the investment in technological development is obviously insufficient.Through empirical analysis,it is found that banking competition has significant influence and difference on the adjustment of different capital investment directions,and under the background of banking competition,the adjustment of enterprise investment structure also has a positive effect on its efficiency.The study gets the following enlightenment:(1)Promoting the development of small and medium-sized banks,optimizing the banking market structure system,and promoting the effective competition of the banking system provide an important reform path to help the real economy out of weakness and move towards scale and diversification.(2)Strengthening the external supervision mechanism of enterprise investment is an effective way to reduce the irrational investment.When banks issue loans and accept guarantees to enterprises,they should make full use of the favorable position of rulemaking and review,strengthen the sense of responsibility of the undertaker,promote the information disclosure of the company,and effectively restrict the borrowing companies.(3)We should pay more attention to the pertinence of policies,earnestly consider the actual needs of non-state-owned enterprises and small-sized enterprises in investment and financing,and suit the remedy to the case.(4)The degree of marketization also plays an important role in the influence of banking competition on enterprise investment behavior.This requires further improving the relationship between the government and the market,creating a good business environment,and providing a more fair and efficient service system for market participants.The conclusions may provide useful enlightenment for further promoting the marketoriented reform of Chinese banking and improving the high-quality development of the real economy.