Bank market structure and firm innovation-evidence from China.

PLoS One

Research Institute of Economics and Management, Southwestern University of Finance and Economics, Chengdu, China.

Published: March 2024

This study explores the impact of bank market structure on firm innovation in China using a two-way fixed effects model. Our analysis is based on a dataset comprising 2,412,316 firm-city level observations. Our findings suggest that there exists a U-shaped relationship between bank market structure and firm innovation in China. Specifically, we identify that the financing channel is a crucial pathway through which bank market structure influences firm innovation. Moreover, our results indicate that this relationship is mainly driven by small firms and innovative firms, and is more pronounced in regions with stronger intellectual property rights protection or greater openness to foreign markets. In sum, this study contributes to the existing literature by advancing our understanding of the impact of bank market structure on innovation in Chinese firms.

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Source
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC10936819PMC
http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0296391PLOS

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