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Bank Competition, Financing Constraints and Enterprise Innovation

Author

Listed:
  • Jingya Hou
  • Xiaoyu Lu

Abstract

In recent years, the innovation behavior of enterprises has attracted more and more attention. Our study proves that encouraging bank competition can promote enterprise innovation. The study found that there is a negative correlation between the bank concentration index in county areas and the innovation output of local enterprises in China. At the same time, we find that bank competition can more effectively improve the financing constraints of private enterprises and small enterprises, thus promoting enterprise innovation. Â JEL classification numbers: G21,O31,O32.

Suggested Citation

  • Jingya Hou & Xiaoyu Lu, 2022. "Bank Competition, Financing Constraints and Enterprise Innovation," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 12(6), pages 1-3.
    • Handle: RePEc:spt:apfiba:v:12:y:2022:i:6:f:12_6_3
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    References listed on IDEAS

    as
    1. Brown, James R. & Petersen, Bruce C., 2009. "Why has the investment-cash flow sensitivity declined so sharply? Rising R&D and equity market developments," Journal of Banking & Finance, Elsevier, vol. 33(5), pages 971-984, May.
    2. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.
    3. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    4. Cornaggia, Jess & Mao, Yifei & Tian, Xuan & Wolfe, Brian, 2015. "Does banking competition affect innovation?," Journal of Financial Economics, Elsevier, vol. 115(1), pages 189-209.
    5. Bronwyn H. Hall & Nathan Rosenberg (ed.), 2010. "Handbook of the Economics of Innovation," Handbook of the Economics of Innovation, Elsevier, edition 1, volume 1, number 1.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bank Competition; Financing Constraints; Enterprise Innovation; Credit Discrimination.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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