Do SMBs give play to their advantages in serving SMEs? Evidence from SMBs branching deregulation in China.

Based on the unique setting of small and medium-sized banks (SMBs) branching deregulation in China, this paper examines the impact of SMBs branches expansion on the credit availability of enterprises by using spatial distribution of SMBs branches at firm-level. We find that SMBs branches expansion has a stronger effect on improving the credit availability of large-scale enterprises compared with SMEs, indicating that SMBs don't give play to their advantages in serving SMEs. Our study provides empirical evidence for the hypothesis of 'Comparative Advantages of SMBs' and policy implication for the reform of banking structure. [ABSTRACT FROM AUTHOR]