Study of the Impact of Competition on Common Wealth in Rural Commercial Banks in County Areas

Suyan Wang

doi:10.6981/FEM.202502_6(2).0005

Authors

Suyan Wang

DOI:

https://doi.org/10.6981/FEM.202502_6(2).0005

Keywords:

County Rural Commercial Banks; Bank Competition; Common Affluence; Entrepreneurial Activity; Level of Urbanization; Upgrading of Industrial Institutions.

Abstract

Chinese-style modernization is a modernization in which all people share the common wealth. Despite China's historic achievements and changes in the field of agriculture and rural areas, problems such as the weak foundation of rural economic development and the large income gap between urban and rural residents still exist. While rural commercial banks, as financial intermediaries, play a crucial influence in rural economic development, this paper innovatively considers county areas that are closely related to rural economic issues, and through theoretical analysis, examines whether and how competition among rural commercial banks in county areas is related to common prosperity, and therefore selects the 2000-2021 period that involves 23 provinces, 225 cities, and 1004 counties within the 8647 data from 989 rural commercial banks to empirically analyze the relationship between competition and common wealth in county rural commercial banks. The study finds that competition among rural commercial banks in counties is not only conducive to promoting economic growth, but also helps to close the income distribution gap, which in turn has a positive effect on the common wealth, and there is regional heterogeneity in all of them.

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