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Corporate Financing Constraint: Interest Rate Liberalization and Small-and Medium-size Banks Development——Evidence from Chinese Listing Corporation |
HU Yuancheng,ZHANG Chaoyang |
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Abstract Based on the Euler equation model and improved measurement, this paper discusses the effect of the interest rate liberalization and small-and medium-sized banks development on corporate financing constraints and their synergy effect. The result shows that, on the separate effects, interest rate liberalization and small-and medium-sized banks development can significantly relieve corporate financing constraint especially for small corporations, and the effect of small-and medium-sized banks development appears especially greater. And on the synergistic effect, after controlling the effect of interest rate liberalization (small-and medium-sized banks development), whose result remains significant, small-and medium-sized banks development (interest rate liberalization) can still significantly ease corporate financing constraint especially for small corporations. The conclusions, not only verify the effectiveness of interest rate liberalization and small-and medium-sized banks development in significantly affecting corporate financing constraint, but also provide empirical evidence for the two means to synergistically ease the corporate financing constraint.
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Received: 10 March 2016
Published: 15 October 2016
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Corresponding Authors:
HU Yuancheng
E-mail: hu-yc@163.com
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