Abstract:
Whether enterprises’ R&D investment can receive adequate funding from financial market is receiving much attention from both academic field and practice field. In addition, it’s also an essential question in building an innovation-oriented country. This paper theoretically demonstrates how competitive market structure of banks can influence R&D financing constraints, based on real situation in China that competition are found between small and medium-sized banks and the big four state-owned banks and emerging commercial banks. We use listed firms in Chinese A-share stock market from 2002 to 2009 as sample, and make conclusions that competitive banking structure can help to ease R&D investment financing constraints and this influence is more significant in small, private and high-tech firms. This paper can contribute to understanding how financial development promotes economic growth and establishing related policy.
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