Abstract
This paper studies the relationship between bank concentration and economic growth in China. It uses panel data for 31 provinces and 8 different sectors over the period 2001–2013. Using two-stage least squares regressions, we find that bank concentration negatively and significantly impacts sectoral growth for Chinese provinces. This finding has relevant policy implication for policy-makers and academics since it suggests that the low level of bank concentration in the Chinese financial sector promotes economic growth, a finding that this is highly relevant in this period of economic slowdown.
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