Research On The Impact Of Banking Competition On Financing Constraints Of SMES

With the deepening of economic development and reform,a large number of SMEs have sprung up like mushrooms,and SMEs have played an irreplaceable role in promoting economic development and increasing employment.However,due to the relatively small scale and weak strength of SMEs,and the relatively small financing channels for SMEs,SMEs generally face financing constraints.In China,bank loans have always been the most important channel for SMEs to raise funds,so changes in banking competition will certainly be closely related to SMEs' financing constraints.Along this line of thought,this article focuses on the impact of China's banking competition on the financing constraints of SMEs.Based on previous scholars' research literature,this article analyzes the current situation of banking competition and SME financing constraints,proposes two research hypotheses,and uses data of SME board non-financial companies from 2009 to 2018 to analyzes the impact of banking competition on the financing constraints of SMEs.Among them,the measurement of banking competition uses the HHI index.The research results show that there are financing constraints in China's small and medium-sized enterprises,and increased competition in the banking industry is conducive to alleviating the financing constraints of small and medium-sized enterprises.Then,the robustness test is performed on the empirical results and the test shows that the conclusion is robust.At the end of this article,relevant suggestions are made on SMEs themselves,the banking industry and government departments.SMEs need to improve their internal management,strengthen their internal management systems,strengthen ties with financial institutions such as banks,adapt to the market,and continuously improve their core competitiveness.The banking industry must optimize its own structure,improve competition,lower the barriers to entry,create specialized financial institutions or platforms suitable for SMEs,innovate financial products,and launch more SME-oriented businesses.The government needs to formulate sound financial support policies,strive to develop more financing channels for SMEs,and promote the improvement of the guarantee system and the social credit system.