A Study Of The Impact Of Bank Structural Competition On Corporate Credit Availability

The Chinese banking industry’s market structure has been transformed from monopoly to competition.Particularly since the Banking and Insurance Regulatory Commission issued two policies for small and medium-sized banks’ market access,the number of banking branches has increased,intensifying the banking industry’s structural competition.Despite the fact that the financial system is constantly innovating and financing channels are becoming increasingly rich in our unique financial environment,China remains a bank-oriented financial system at the moment.The bank credit market accounts for more than half of the total social financing scale.The bank loan financing channel remains the primary source of funds for microinstitutions.Therefore,changes in the structure of the banking industry are bound to have an impact on micro enterprises.Can the competitive market structure of the banking industry improve the problem of long-term credit shortage of enterprises in the context of bank branch expansion? What are the mechanisms of influence? What is the difference in the impact on various enterprise characteristics? This paper examines the relationship between bank structural competition and corporate credit availability using existing literature.The relationship between banks and enterprises has always been a topic of academic interest in the study of the financial system serving the real economy.The main issue between banks and businesses is information asymmetry,which is a significant barrier to enterprise financing.At the moment,some researchers are debating the role of a mechanism that alleviates information asymmetry between bank structure and corporate credit,based on the belief that bank competition motivates banks to actively obtain corporate information.These findings highlight the significance of corporate information transparency in the credit market.As a result,this paper examines the availability of enterprise credit from the standpoint of information quality.This paper contends that banks can identify real earnings management of enterprises based on the signal transmission theory of the credit market.The competitive market structure of the banking industry,in particular,encourages banks to improve their ability to identify and control risks,so banks have higher standards for the quality of corporate financial information to prevent credit risks.To address the issue of information asymmetry,enterprises will take the initiative to reduce the level of real earnings management and transfer high-quality financial and business information to banks.It has the potential to lower bank agency costs while increasing the availability of enterprise credit.Based on theoretical analysis,this paper selects as research samples non-financial A-share listed companies with long-term loans from 2007 to 2020,and employs panel data for empirical testing.The findings indicate that:(1)bank structural competition can significantly improve corporate credit availability;and(2)real earnings management acts as an intermediary in the influence of bank structural competition on corporate credit availability,i.e.,bank structural competition improves corporate credit availability by reducing the degree of real earnings management.Simultaneously,positive and negative real earnings management are empirically tested in terms of earnings management direction.It is discovered that bank structural competition primarily affects enterprise credit availability by reducing positive real earnings management,but has no significant effect on negative real earnings management.(3)Government intervention has a negative moderating effect on the impact of bank structural competition on corporate credit availability,reducing the efficiency of credit resource allocation.(4)It is discovered through enterprise heterogeneity analysis that bank structural competition has a greater impact on credit availability of non-state-owned enterprises,enterprises in the eastern region,and enterprises with large profit fluctuations;the channels through which bank structural competition affects corporate credit availability by reducing real earnings management are more significant in state-owned enterprises and firms with morbid profit fluctuations.Based on the analysis’ key points and main conclusions,this paper makes relevant suggestions in the fields of bank structure,corporate information disclosure,and government intervention,in order to contribute to the development of a banking structure that suits economic development and supports the development of the real economy.