The Mitigation Effect Of Supply Chain Finance On The Financing Constraints Of Small And Medium-sized Enterprises

"If Small and medium-sized enterprises are good,Chinese economy will be good." During the 14 th Five-Year Plan,China issued a series of policies to benefit and strengthen enterprises including policy system,service system,and development environment,which fully demonstrated the government’s attention to the development of small and medium-sized enterprises.Small and medium-sized enterprises are the most dynamic and creative economic entities in Chinese economic system.They play an indispensable role in promoting employment,increasing national income and national taxation,ensuring social stability,and promoting technological innovation.However,the problem of financing constraints is the key issue that hinders the further development of SMEs.Due to the limitation of scale,the internal finance of SMEs are often insufficient to support their sustainable development,and the bank-enterprise information asymmetry makes it difficult for SMEs to obtain funds from traditional financial institutions such as commercial banks.Therefore,both internal and external financing channels are affected which leads to the difficult and expensive financing of small and medium-sized enterprises.With the development of digital finance,the practical significance of supply chain finance is greatly enhanced,which can effectively make up the funding gap of small and medium-sized enterprises.The 2021 report on the work of government raised the development of supply chain finance to the height of national strategy for the first time and made it play an important role in country’s financing structure reform and the real economy finance.Supply chain finance relies on the whole credit of supply chain,it helps to lower the entry barriers for SME financing through the form of corporate credit bundling.Diversified participants make the division of labor more specialized and scientific,further reducing the transaction costs of financing activities,and improving the financing efficiency of small and medium-sized enterprises.From the perspective of the enterprise life cycle,this paper treated SMEs as organic organisms and considered the dynamic changes in the financing constraints of supply chain finance on SMEs in different growth stages.First,we analyzed relevant theories and existing research results,and then explored the financing status of SMEs,the reasons for financing constraints and the financing needs of SMEs in different life cycles.Then,starting from the connotation and status of supply chain finance,based on information asymmetry theory and transaction cost theory,we analyzed the mechanism of supply chain finance alleviating the financing constraints of SMEs.Finally we used small and medium-sized enterprises on the Shenzhen Stock Exchange as a sample which includes unbalanced panel data from 2012 to2020 to conduct an empirical analysis of the role of supply chain finance in alleviating the financing constraints of small and medium-sized enterprises with cash-cash flow model.The research found that: Firstly,Chinese small and medium-sized enterprises have obvious financing constraints,that is,cash-cash flow sensitivity.Secondly,the development of supply chain finance can effectively alleviate the financing constraints of SMEs,and its mitigation effect is mainly based on the effect of reducing information asymmetry and reducing corporate financing costs.Thirdly,the effect on financing constraints of supply chain finance shows heterogeneity in the life cycle of different enterprises.Based on theoretical and empirical research,we made some suggestions for SMEs using supply chain finance from three perspectives including SMEs,financial institutions and government.Hoping to provide references for the healthy development of supply chain finance and SMEs.