Bank Competition,Financing Constraints And Investment Efficiency Of Corporate

As one of the most important external financing channels for Chinese corporate,the imbalance development of credit allocation in banking system has made Chinese listed corporate faces relatively serious financing constraints.In recent years,with the gradual liberalization of private capital,a large number of joint-stock commercial banks and city commercial banks have emerged in the banking industry.The competition of the bank industry is continuously intensifying,which will inevitably brings a huge impact to the corporate.So this paper conducts a series of researches to study the relationship between the bank competition and the financing constraint of Chinese listed corporate and the mechanism in the relationship.At the same time,considering that the changes of the corporate's holding funds will affect its investment activity,this paper further analyzes the impact of the changes in the banks' competition structure on the investment efficiency of corporate,and its differences between corporate facing different degrees of financing constraints..Based on the sample of the A-share listed corporate from 2006 to 2017,this paper firstly uses the cash-cash flow sensitivity model to verify the relationship between bank competition and corporate' financing constraints,and explores whether this effect will be affected by corporate heterogeneity,which finally comes to the following conclusions:(1)In general,the improvement of the bank competition helps to alleviate the financing constraints of corporate,which is more significant for the private corporate,for the corporate supported by the industrial policies,and for whom located in the western area;(2)The improvement of bank competition in China mainly through increasing the scale of loans and strengthening information disclosure of corporate to help corporate alleviate the problem of financing constraints,but the mechanism for lowering lending rates does not exist.Then,this paper constructs the SA index which measures the degree of corporate' financing constraints,divides the sample into high-financing constraint group and low-financing constraint group,and further analyzes how the improvement of bank competition affect the investment efficiency of corporate facing different degrees of financing constraints.Firstly,based on the conclusion that the increase in cash holdings can increase the value of corporate,this paper verifies that this positive effect is more obvious for high-financing corporate,thus more efficient in investing when holding cash.Further more,this paper finds that the improvement of bank competition can effectively improve the investment efficiency of corporate,and this promotion is more significant for corporate facing high financing constraints.In the robustness test,this paper conducts robustness analysis by replacing the measurement of bank competition and financing constraints,and adds a instrumental variable in the model.The empirical results also support the main conclusions of this paper.This paper provides ideas for alleviating the financing constraints of listed corporate in China from the perspective of financing channels,and the mechanism analysis illustrates the need to accelerate the pace of interest rate marketization reform.