Research On Banking Competition, Political Connections And Relationship Lending

Small and Medium sized Enterprises (SMEs) have become an important force to promote economic development and job enlargement. The problem of financing always restrict the development of SMEs. The main channel for SME financing continues to bank loans, relationship lending is an important way of bank loans. But Many studies for the structure of banking in different countries, the relationship lending can become a type solve the bottleneck of effective SME financing channels of the different conclusions. In this paper, from China's banking market structure characteristics and background of the special constraints of loans, I use the cost-benefit aspects of the enterprise analyses relationship lending choice.Based on the above analysis, this paper between 2006-2008 small sample of the listed companies on the object, through multiple linear regression method to study the above research, The results show when the competition is weak companies more willing to choose relationship lending, as competition intensifies, the choice of relationship lending will be reduced. In addition, this group conducted tests, that the country ownership of enterprise relational financing options will be more vulnerable banking competition impact and on the basis of this analysis, the combination of the background of China under the special lending constraints of the relationship between the type of non-state enterprises loans. This relationship lending by China's SMEs to solve the financing problem provides a good proposal.