The impact of banking competition on firm total factor productivity

The benefits of financial development to economic growth are conspicuous, but due the heterogeneity across regions and firms, effects competition have not been fully proved. There is a puzzling phenomenon in many developing countries, that is, banking monopoly coexists with growth. This study uses industrial enterprise data analyse how affects firm total factor productivity (T.F.P.) influence size ownership this process. results show promotes firms improve their T.F.P., which realised by alleviating financing constraints through increasing aligns market power hypothesis. Moreover, enables small T.F.P. fewer state-owned banks branches more branches. Intensified leads an increase private it has no effect on enterprises (S.O.E.s) foreign firms. expansion bank cross region operation city commercial helpful confirms impact caused changes determinants productivity.