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https://doi.org/10.62836/emi.v5i2.0008
Zhang, Y. (2026). Bank Competition, Equity Financing, and Corporate Innovation. Economics & Management Information, 5(2), 0008. https://doi.org/10.62836/emi.v5i2.0008
Volume 5, Issue 2, June 2026
Copyright (c) 2026 Yangfa Zhang
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This work is licensed under a Creative Commons Attribution 4.0 International License.

Bank Competition, Equity Financing, and Corporate Innovation

Based on the theories of information asymmetry, information rent and resource dependence, this paper constructs an integrated analytical framework to investigate the impacts of bank market competition and equity financing on corporate innovation. Using panel data of Chinese A-share listed companies from 2013 to 2020, this paper conducts a systematic empirical examination. The results indicate that bank market competition presents a significant inverted U-shaped relationship with corporate innovation: moderate competition promotes innovation, while excessive market dispersion produces an inhibitory effect. Equity financing exerts a continuously increasing positive influence on corporate innovation, and its marginal promotional effect strengthens with the expansion of financing scale. There exists a notable complementary effect between bank market competition and equity financing; the two jointly enhance innovation support through information spillover, collaborative governance and risk diversification mechanisms. Heterogeneity analysis shows that private enterprises and small- and medium-sized enterprises are more sensitive to changes in the two financing channels.

bank market competition equity financing corporate innovation complementary effect inverted U-shaped relationship

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Supporting Agencies

  1. Funding: This research received no external funding.