Banking Market Structure,Switching Cost And The Bank Lending Channel Of Monetary Policy Transmission

As an important means of macro-regulation,monetary policy and its conduction mechanism has a critical influence on the national economy.The policy instruments,which are used by the central bank for macro-regulation,its effectiveness mostly depends on the changes of bank lending.Now,under the background that the global economic growth slows down,Chinese economy is facing with a "new normal" and its structure reformation,the government is repeatedly stressing the "innovation and improvement of macro-control mechanism",banking market structure and switching cost will be the important factors which need to be taken into consideration when the central bank tries to affecting macroeconomic via monetary policy.In the aspect of theory,there are many disputes on the effect of banking market structure on the lending channel.The literature suggests that the omission of the switching cost,which is rarely measured but plays an important role,may be one of the incentives.This paper introduces the key variable "switching cost",and estimate it using the KKV model.And it's an attempt to focus on the credit market of China's banking lending market.Different from the existing research,the supply of credit of commercial banks and the demand of bank dependent borrowers will be used as a clue,and I focus on the logical between banking market structure,the switching cost and the bank lending channel of monetary policy transmission.Based on the annual panel data of 12 listed banks in China during 2007-2015,this paper tests the banking market structure,switching cost and the bank lending channel of monetary policy transmission by three steps.The results show that: First,the switching cost acts as an intermediary variable in the role of the banking market structure in the monetary policy credit channel transmission.Second,there is a bank lending channel of monetary policy transmission in our country,and the decrease of bank concentration and switching cost can enhance the transmission efficiency.Third,lower bank concentration is often accompanied by lower conversion costs,bank penetration has a significant positive impact on the switching cost.Fourth,in the bank individual characteristics,when other conditions remaining unchanged,the scale of the credit amount is significantly positive.Lastly,in the macro-control variables aspect,different from the developed countries,the growth rate of social fixed assets investment has a negative effect on the amount of credit.In this paper,we clarify the logic between the three roles and the path they impact each other,revealing the impact of the banking market structure and the switching cost in the bank lending channel of monetary policy transmission.This will help policy makers to consider the relevant factors when making decisions,and to provide reference for China's macroregulation and market structure reform of the banking sector.Finally,this paper offer policy proposal to optimize the market structure of banking industry,the reform process,the market value structure reform of financial market upgrading and coordination to promote the healthy development of the economy.