Banking Integration and Capital Misallocation: Evidence from China
利用中国省内跨城市银行放松管制的外生变化，研究发现银行一体化使高资本边际收益企业的实物资本增加19.3%，边际收益降低33.1%，对非国有企业和与一体化银行关联更强的企业影响更显著。
Abstract Using the staggered intercity but within-province deregulation of local banks in China as exogenous variations, we evaluate the effect of banking integration across geographical segmentation on capital misallocation. Based on an administrative data set comprehensively covering Chinese manufacturing firms, we find that for firms with initially high marginal revenue products of capital (MRPK), the integration increases physical capital by 19.3%, and reduces MRPK by 33.1% relative to low MRPK firms. Our findings are more pronounced for non-state-owned firms and firms with higher exposure to integrated banks. Integration also significantly increases the responsiveness of firms’ investments to deposit shock on other cities within the same province.