Currently, the development of the small and medium enterprises has attracted attention from various fields. And many researchers are working on solve two main problems SMEs met, namely the limited credit availability and the high funding cost. This dissertation studies these problems from the perspective of the banking industry. By taking an empirical test on industrial enterprise data of China, an inverted U shape relationship has been found between the generation of the SME and banking structure. The empirical result also indicates state-owned economy and industry structure could affect SME generation, too. The policy implication of this essay is to optimize the banking industry structure and support the small and medium banks to support SME funding. Meanwhile, it is important to maintain regional financial stability by preventing the risk of excessive competition in banking market. | Structural changes in the banking industry and the generation of small and medium enterprises: An empirical study based on China’s 1998-2013 industrial enterprise data
