An Empirical Research On The Effects Of Listed Companies’ Holding Bank Shares On Financing Constraint

Financial-industrial integration is an important approach for enterprises to achieveleapfrog development. Since banking industry is the core of the financial system, it’s aninevitable trend for enterprises to integrate with the banking industry. Although banks areforbidden to hold the shares of enterprises, holding bank shares from listed companies areincreasing, which changes the ownership structure of listed companies and banks. Thegovernment eases the policies related to holding bank shares, which further promotesenterprises to hold bank shares and encourage private capital to hold shares of financialinstitutions. Under this background, studying on holding bank shares of enterprises hasprofoundly practical significance. Previous studies have found that holding bank shares canease the financing constraint of enterprises, but they did not study the different influenceunder different circumstances. In order to supplement and deepen the previous studies, thispaper analyzes the different influence on the financing constraint of enterprises by holdingbank shares. This paper can enlighten the enterprises to overcome financing constraint, aswell as the government to lead the financial-industrial integration trend.In this paper, the main line is the relationship between holding bank shares and thefinancing constraint of enterprises. It also adds the following factors: company size, the natureof ownership, the industry competition, monetary policy and financial marketization, toinvestigate the different relationship under different circumstances. The data selected fromA-share listed companies between2005and2012. After excluding samples of financialcompanies and samples with missing data, this paper gets14,018valid samples. The thesisuses the Cash to Cash Flow (CCF) model by Almeida et al.(2004) as the basic model offinancing constraint, and uses the dummy variable of listed companies hold bank shares or notas the substitution variable of holding bank shares.Through the empirical analysis, the conclusions of this paper include the followingaspects:(1)Holding bank shares can ease listed companies’ financing constraints. Thefinancing constraints of listed companies holding bank shares are lower than those companieswithout holding bank shares.(2)The influence on easing financing constraints by holdingbank shares is more significant for small-size companies than large-size companies.(3)The influence on easing financing constraints by holding bank shares is more significant fornon-state-owned companies than state-owned companies.(4)The influence on easingfinancing constraints by holding bank shares is more significant for companies in high-degree industry competition than companies in low-degree industry competition.(5)Theinfluence on easing financing constraints by holding bank shares is more significant in theperiod of loose monetary policy than in the period of tight monetary policy.(6)The influenceon easing financing constraints by holding bank shares is more significant in the region withlower degree of financial marketization than in the region with higher degree of financialmarketization.This thesis further put forward some suggestions on how to ease the financing constraint.For enterprises, they should establish good long-term relationship with banks through holdingbank shares, and actively seeking method to ease the financing constraint when the externalfinancing environment is harsh; for the government, it should further encourage thefinancial-industrial integration, improve our financial system, and enhance the level offinancial development.