Bank Branch Expansion And Corporate Financing Constraints

In the financial system dominated by indirect financing,inevitably,the change in the number of bank branches will have a profound impact on the financing situation of enterprises.Increasing the number of small and medium-sized financial institutions is an important part of China's financial supply side structural reform.It is undoubtedly of great theoretical value and practical significance to continually understand the relationship between the number of bank branches and the financing constraints of enterprises.This paper manually collates the number of commercial bank branches owned by 283 prefecture level cities in China every year,and merges with the database of China's industrial enterprises from 2006 to 2013.From the perspective of meso and micro,it is the first time to explore how the expansion of bank branches at the city level affects the financing constraints of enterprises.The empirical results show that the expansion of bank branches significantly reduces the financing constraints of local industrial enterprises.The heterogeneity analysis shows that,compared with state-owned enterprises and large enterprises,the impact of Bank branch expansion on financing constraints is more significant in non-state-owned enterprises and small and mediumsized enterprises,indicating that local discrimination on credit scale and ownership has been alleviated;Compared with local small and medium-sized banks,the expansion of national bank branches has a more significant effect on the alleviation of financing constraints.After a variety of robustness tests,the above conclusions are still valid.The results show that the expansion of bank branches is conducive to the development of enterprises,but the local government's credit intervention will weaken the economic effect.At present,China should further relax the market access of small and medium-sized bank branches,and strengthen the supervision and marketization of local finance.