حجم بانک و وام دهی به شرکت های کوچک و متوسط (SME): شواهد از چین
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|17977||2009||12 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : World Development, Volume 37, Issue 4, April 2009, Pages 800–811
Using panel data collected in 2005, we evaluate how bank size, discretion over credit, incentive schemes, competition, and the institutional environment affect lending to small- and medium-sized enterprises in China. We deal with the endogeneity problem using instrumental variables, and a reduced-form approach is also applied to allow for weak instruments in estimation. We find that total bank asset is an insignificant factor for banks’ decision on small- and medium-enterprise (SME) lending, but more local lending authority, more competition, carefully designed incentive schemes, and stronger law enforcement encourage commercial banks to lend to SMEs.
The discrepancy between China’s economic structure and financial structure is best manifested by the mismatch between the contribution of small- and medium-sized enterprises (SMEs) to economic growth and the amount of credit they have obtained from formal financial institutions. Since China launched its economic reform in 1978, its economy has switched into the fast lane of economic growth. China had achieved 9.75% annual GDP growth during 1979–2007, making it one of the fastest growing economies in the world by any standard. SMEs have played an active role in economic growth. According to the National Bureau of Statistics, 99.6% of enterprises in China are SMEs at the end of 2005. These enterprises account for 59% of GDP, 60% of total sales, 48.2% of taxes, and about 75% of employment in urban areas. SMEs’ participation in international trade and outward investment is also very significant, representing 68.85% of the total import and export values and about 80% of outward investment. In contrast to its contribution to the economy, the difficulty of SMEs to obtain external financing from formal financial institutions is widely recognized. Lin (2007) documented that no more than 0.5 million of over 40 million SMEs could obtain bank loans in 2006. In other words, over 98% of SMEs have no access to formal financing. The World Bank Investment Climate Survey for China also indicates that SMEs in China are facing greater credit constraints and have more limited access to bank loans than in other Asian countries. According to this survey, SMEs in China obtain only 12% of their capital from bank loans, while their peers obtain 21% in Malaysia and 24% in Indonesia. The survey also shows that “the lack of formal finance among small firms becomes starkly worse as firm size decreases. Firms with at least 100 employees finance 27% of their capital through bank loans, compared to 39% in India. Firms with between 20 and 100 employees finance 13% of their capital through bank loans, compared to 38% in India. Firms with fewer than 20 employees finance only 2.3% of their capital, on average, through bank loans, compared to 29% in India.” (Dollar, 2003, p. 41). Lacking appropriate financing channels has become the main hurdle for the development of SMEs. Lin (2007) argues that as SMEs are often labor-intensive enterprises, their ability to absorb labor costs are reduced when they face credit constraints. Many Chinese economists have therefore encouraged the establishment of small- and medium-sized banks to deal with the difficulty of accessing bank credit for SMEs (Guo and Liu, 2002, Li, 2002, Lin and Li, 2001, Wang and Zhang, 2003, Zhang, 2000 and Zhang, 2002). These proposals are based on the idea that small- and medium-sized banks have comparative advantage in lending to SMEs because they tend to interact much more personally with their borrowers (e.g., Berger, Miller, Petersen, Rajan, & Stein, 2002) and are able to utilize more soft information (Petersen, 2004) to address problems such as informational opaqueness, moral hazard, and adverse selection (e.g., Stiglitz & Weiss, 1981). Regardless of size, however, banks in China may lack the incentive to identify the most profitable SMEs because of the following reasons: • Not all banks in China are solely profit-maximizing financial institutions so determining the most profitable SMEs may not suit the best interest of bank governors. • Even if local branch managers are able to distinguish credit-worthy SMEs, they may not do so because they do not have full control over lending. • Bank managers may not have the incentives to work hard because better quality does not necessarily mean better benefits to them. • Factors outside of financial institutions, like bank competition, government influences, and law enforcement, can either encourage or discourage banks’ lending to SMEs. These factors raise policy concerns about the effect of establishing small- and medium-sized banks on the supply of credit to SMEs. Existing literature has intensively studied the relationship between bank size and loans to SMEs, but it provides little information on the overall impact of the above factors. This paper therefore makes two important contributions to the literature. First, we use a unique data set to see how the factors identified in the existing literature and those unique to China affect lending to SMEs in China. These panel data were collected by us from a retrospective survey that covers 79 counties in 12 provinces in 2005. They include information on banks’ governance structure, deposit, and loan policy, incentive scheme, and banks’ balance sheet from 2001 to 2004. One particular strength of these data is detailed information are collected on loans. The questionnaire surveys banks’ loan policy, loan approval rights, loan structure, their subjective evaluation of government influences and law enforcement, and basic information about their customers. These institutional-level data are then combined with county-level statistics to construct the final panel data. The second contribution is we provide a careful treatment of the endogeneity problem caused by the influence of SME lending share on the explanatory variables in this study. We propose instruments for our main endogenous variable and further use the reduced-form approach to provide consistent inferences even if the instrument is weak. We find that the bank size alone is not an important factor in determining SME lending. The factors affecting the bank manager’s incentives, like the linkage of wage with loan quality, tend to have a significant impact on SME loans. Competition and institutional arrangements can also significantly affect loan decisions to SMEs. Section 2 reviews the empirical literature that has examined the relationship between bank size and SME lending, and provides our main hypothesis on the role of banks in lending to SMEs in China. Section 3 gives some background information about China’s banking system, describes the data set, and gives our methodology for testing the hypotheses. Section 4 presents our study’s empirical results, and Section 5 concludes our work.
نتیجه گیری انگلیسی
The difficulty of SME financing has attracted great attention from both the government and the academia because it has important implications for long-term economic development. Many scholars in China have suggested addressing the problem through establishing small- and medium-sized banks. However, the literature has not reached consensus with regard to the relationship between bank size and small business lending, and a comprehensive evaluation of factors affecting SME lending in China is absent. Using unique panel data constructed from the Ecological Environment Survey conducted by the authors in 2005, we evaluate how bank size, lending authority (self-loan approval rights), incentives of loan officers (profit weights in performance evaluation, and the payment scheme), bank competition, and institutional arrangements affect SME lending. We find that measured by total asset, bank size as is an insignificant factor for SME lending in most of our specifications. On the other hand, if we define banks with more hierarchical level as big and RCCs as small, these data provides evidences that smaller banks can lend more to SMEs. Further, if an institution has more self-loan approval right, greater competition, and if the loan manager’s wage is linked with loan quality, lending to SMEs will be higher. From the institutional point of view, we find that weak law enforcement will lead to less SME lending. The current data set also indicates that in most cases, soft information is an important consideration when banks make decisions about SME loans, only if wages are linked with loan quality and cost control measures are undertaken. The literature supporting the concept that small banks tend to provide greater SME lending narrates the story that “if a bank is small, then the bank can collect more soft information; SMEs are at a comparative advantage in providing soft information, and thus small- and medium-sized banks are more willing to lend to SMEs.” Our study therefore indicates that in China, even if a bank has the advantage of collecting soft information, whether it has an incentive to fully utilize such information is critical for the success of the above story. If a local bank has higher self-loan approval rights, if the upper branch provides greater pressure in making profit through increasing the weight of profit in performance evaluation, and if wages are linked with loan quality and cost control measures are undertaken, then the local bank tends to work hard on collecting and using soft information to find high-quality customers. The above discussion does not discourage the establishment of small- and medium-sized banks even though total bank asset is not a significant factor. In fact, more small- and medium-sized banks can lead to greater SME lending by generating more intensified competition in local markets. Also, small-sized banks with less hierarchical levels will lend more to SMEs. On the other hand, to ensure that a small- and medium-sized bank can grow in a sustainable fashion, it needs to be granted the authority to control its funds, and incentive schemes for loan managers need to be worked out carefully. In this process, the government can still play an active role, not through directly interfering in loan decisions but through fostering a good institutional environment such as stronger law enforcement.