Bank-enterprise Connection And Financing Constraints:Macro Effect And Micro Mechanism

Based on the macro-efficiency and micro-mechanism perspectives,this paper discusses three issues surrounding the bank-enterprise connection and SMEs financing.Can bank-enterprise connection ease SMEs financing constraints? What is the micro-mechanism of bank-enterprise connection affecting the financing of SMEs? And how is the bank credit allocation efficiency under the bank-enterprise connection model? In order to solve these problems,this paper first constructs a signaling game model,which proves that bank-enterprise connection has a positive effect on alleviating the financing constraints of SMEs.On the basis of theoretical analysis,this paper measures the bank-enterprise connection with two dimensions which are called top manager connection and share-holding connection and uses the data of the listed SMEs between 2009 and 2016 to conduct empirical research.It is found that more than 50% of SMEs have bank-enterprise connection,and more than 30% of SMEs have top-manager connection and share-holding connection,indicating that bank-enterprise connection is a relatively common economic phenomenon for SMEs in China.Judging from the macro-economic results of bank-enterprise connection,SMEs with bank-enterprise connection are more likely to obtain bank credit resources,especially longer-term credit resources,thus alleviating corporate financing constraints.However,bank-enterprise connection cannot significantly reduce the financing costs of SMEs.After introducing the institutional environmental variables,it was found that the role of bank-enterprise connection easing of financial constraints is even more pronounced in areas where financial development is relatively backward.From the point of view that the micro-mechanism of bank-enterprise connection acting on the financing of SMEs,this paper first constructed an index to measure the degree of asymmetrical information,and found that bank-enterprise connection can significantly reduce the degree of information asymmetry and thus ease the financing constraints.And we call this the information effect.As for the resource effect,it means that companies obtain resources through social relations to ease financing constraints.The empirical evidence shows that the resource effect plays a leading role in the easing of financing constraints associated with bank-enterprise connection.From the perspective of the macroeconomic efficiency of bank-enterprise connection,this paper examines the efficiency of credit allocation under the bank-enterprise connection from the perspective of both corporates and banks.On the one hand,bank-enterprise connection can effectively alleviate the problem of under-investment in SMEs.On the other hand,bank loans will be more sensitive to the efficiency of corporate investment,indicating that bank's credit funds prefer more efficient SMEs.Therefore,the bank-enterprise connection has increased the efficiency of the allocation of bank credit resources.Nevertheless,this article pointed out that bank-enterprise connection may lead to over-investment and may cause banks to fall into soft budget constraints.The conclusions of this paper show that the bank-enterprise connection as an informal institution plays a certain role in replacing the formal system and provides a path for solving the financing problems of China's SMEs.However,we need to control and prevent the risks that are hidden behind this connection.In addition,given the dominant resource effect,SMEs still suffer from discrimination in the credit market.In order to fundamentally alleviate the financing constraints of SMEs,it is necessary to establish and improve the marketization system and create a fair market environment.