Banking Competition Relieves Financing Constraints And Promotes Enterprise Innovation

In recent years,with the normalization of epidemic prevention and control,strengthening the credit fund support for smes and improving the overall innovation level of China has become the main goal in the development process at the present stage.Get more substantial increase innovation input,innovation output is the key to small and medium-sized enterprises to improve its market competitiveness,because of the small and medium-sized enterprise is the most innovative potential,the most reluctant to content with the status quo,but all the r&d investment in innovation is inseparable from the capital support,so that Banks an important source of funds for small and medium enterprises,The degree of benign competition within the banking industry is related to the degree of credit fund support for smes’ innovation activities,affecting the high speed and high quality development of smes,as well as the development of the banking industry,and then affecting the progress of the entire national economy.The improvement of China’s science and technology management level mostly depends on small and medium-sized companies,and the development of small and medium-sized enterprises has a great significance to promote the development of China’s national economy.With the development of The Times,the total number of Small and medium-sized enterprises in China is also on the rise,accounting for more than 90% of the total number of private enterprises in China,so they have made a great contribution to tax revenue,solving employment problems and increasing innovation output.However,small and medium-sized enterprises have too few investment sources and too high investment cost,which is always a huge obstacle for small and medium-sized enterprises to advance.It is the main content of this paper to study how to effectively alleviate the financing constraints faced by small and medium-sized enterprises in the process of financing.Starting from the development of the banking industry and the research on the main problems of technological innovation of small and medium-sized enterprises in China,in view of the current financing market in China is still not sound,bank credit investment is still an important source of investment for small and medium-sized enterprises.So this paper put the 2007-2020 years of Chinese small and medium-sized listed companies data match the number of banking competition and patent applications,and investigates the banking competition affect the internal mechanism of technological innovation in small and medium-sized companies,the conclusion,found that the competition can reduce the small and medium-sized companies are constrained by the investment,and enhance their innovation.After weakening the endogeneity problem and a series of robustness tests,the above conclusions are still relatively stable.Through the analysis of market heterogeneity,it can be concluded that compared with state-owned enterprises,banking competition can significantly promote the innovation of non-state-owned companies,while compared with companies with larger market power,banking competition has a more obvious impact on companies with smaller market power.