How Does the Increased Bank Competition Affect Firm Labor Employment:Evidence from a Quasi-natural Experiment of Deregulation of Banks
This paper examines the impact of bank competition on corporate labor employment under the background of the banking deregulation policy implemented in China in 2009.The results show that bank competition significantly increases labor employment in the secondary industry,and leads to a shift in labor from labor-intensive industries to capital-intensive ones.We also find bank competition reduces capital costs,which benefits the investment and expansion of capital-intensive enterprises.Furthermore,heterogeneity analysis reveals that the impact of bank competition on credit availability is particularly significant for large and medium-sized enterprises,low total factor productivity enterprises,capital-intensive enterprises,enterprises with lower financing constraints,and those with a longer establishment history.This paper not only contributes to improving the employment,but also provides the experience and inspiration for China to realize the goal of stable employment.
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