A Study On The Relationship Between China's Banking Competition And Credit Discrimination Through The Lens Of Private Listed Firms' Cash Holdings

There are so many private enterprises in our country,they make much contributions to the development of national economy,however in the aspect of credit,they are suffering from the credit discrimination for so many years.The credit discrimination not only restricts the development of private enterprise,but also weakened the functions the private enterprise have in the field of promoting the development of economy and solving the problem of employment Will the problem of credit discrimination be solved effectively with the development of financial system in our country?In consideration of China's financial system is dominated by indirect financing,this paper by focusing on the changes of competition degree in China's banking market from 2004to 2013,to research whether the changes of competition degree in China's banking market will influence credit discrimination of the private enterprise significantly.Considering the enterprise will hold much sum of cash for the purpose of precautionary motive and existing research also shows that the credit restriction will influence the cash holding level of the enterprise,so under the circumstance of failing to find the agreement case of the enterprise,this paper choose the perspective of cash holdings of private enterprise to study whether the competition in banking market will effect the credit discrimination of private enterprise.At present on one hand the financing channel in our country is single,the commercial bank credit channel still occupied a very important position,the financing in capital market is relatively insufficient,on the other hand,with the rapid development of the rural commercial bank and the city commercial bank,the concentration degree and the competition degree of commercial bank is also undergoing profound changes,the competition of banking market will effect the credit policy of banks,and may also change the credit discrimination degree of the enterprise.Based on the above considerations,this paper will from the perspectives of short term loan growth rate and long term loan growth rate to see whether there is credit discrimination in the private enterprise,and then study the effects of the competition of banking industry have on the credit discrimination and the cash holding level in private enterprise.This paper based on based on the data of Chinese A shares of the listing Corporation during the period of 2004-2013,through theoretical analysis and empirical analysis to study the relationship between the competition of banking industry and credit discrimination,at the same time we examine the effect of competition in banking industry on credit discrimination from the perspective of cash holdings,with the findings as follows:with the findings as follows:(1)when the banking competition degree is reduced,the private listed enterprises to obtain less loans than listed state-owned enterprises,so that private enterprises have suffered credit discrimination;(2)the increase of banking competition will improve the financing environment of private enterprise,making the private listed companies to obtain loans from the bank is more easily;(3)because of credit discrimination the private listed corporate will hold a certain amount of cash when the banking competition is lower,credit discrimination in private enterprises will be eased,the private enterprise cash holdings will be reduced when the banking competition is fierce.