Banking market structure and corporate investment efficiency

IF 3.8 3区经济学 Q1 BUSINESS, FINANCE

North American Journal of Economics and Finance Pub Date : 2024-06-30 DOI:10.1016/j.najef.2024.102236

Japan Huynh

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Abstract

The study examines the link between bank competition and firms’ capital investment efficiency. Utilizing a unique dataset comprising Vietnamese listed firms from 2007 to 2022, we suggest that heightened bank competition, as reflected by lower values of concentration ratios, the Lerner index, and the Boone indicator, raises firms’ investment efficiency. Further analysis reveals that bank competition increases investment efficiency specifically in the form of mitigating the underinvestment issue. The validity of the result holds through numerous robustness tests, especially with careful consideration of endogeneity concerns. Through mechanism tests, our study reveals that increased bank competition elevates corporate investment efficiency by mitigating firms’ financing constraints, offering more bank credit, and reducing financing costs. In cross-sectional analysis, we document that the relationship between bank competition and capital investment efficiency is stronger for firms with closer bank-firm ties, greater investment opportunities, and weaker financial positions (captured by firm size, state ownership, and listing location). Further, we observe that the influence of bank competition is attenuated during macroeconomic shocks, as exemplified by the financial crisis and the coronavirus pandemic.

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银行市场结构与企业投资效率

本研究探讨了银行竞争与企业资本投资效率之间的联系。利用 2007 年至 2022 年越南上市公司的独特数据集，我们发现，银行竞争的加剧（体现为集中率、勒纳指数和布恩指标值的降低）提高了企业的投资效率。进一步的分析表明，银行竞争提高了投资效率，具体表现为缓解了投资不足问题。通过大量的稳健性检验，特别是在仔细考虑内生性问题后，结果的有效性得到了证实。通过机制检验，我们的研究揭示了银行竞争的加剧通过缓解企业融资约束、提供更多银行信贷和降低融资成本来提高企业投资效率。在横截面分析中，我们发现银行竞争与资本投资效率之间的关系对于银行与企业关系更紧密、投资机会更多以及财务状况更弱（通过企业规模、国有产权和上市地点来反映）的企业来说更强。此外，我们还发现，在宏观经济受到冲击时，银行竞争的影响会减弱，金融危机和冠状病毒大流行就是一个例子。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

North American Journal of Economics and Finance Multiple-

CiteScore

7.30

自引率

8.30%

发文量

168

期刊介绍： The focus of the North-American Journal of Economics and Finance is on the economics of integration of goods, services, financial markets, at both regional and global levels with the role of economic policy in that process playing an important role. Both theoretical and empirical papers are welcome. Empirical and policy-related papers that rely on data and the experiences of countries outside North America are also welcome. Papers should offer concrete lessons about the ongoing process of globalization, or policy implications about how governments, domestic or international institutions, can improve the coordination of their activities. Empirical analysis should be capable of replication. Authors of accepted papers will be encouraged to supply data and computer programs.