Is Distance Important to Bank Loans of Private Firms in China

The paper samples 628 of China private firm in 2011 from the A-share markets of Shanghai and Shenzhen Securities Exchanges.We empirically find that there is a significantly negative relationship between distance from firm to bank and bank loan of firm.In the paper,we can not confirm a significant positive relationship between distance from competitors of local bank to firm and bank loan.But we figure out a significant relationship between financial development at home and bank loan.So we think the block effect which competition has on bank loans is not based on bank competition of network,but on financial development at home.Therefore,we have policy suggestion of monitoring financial risk and promoting financial development at home.