The Risk Formation And Contagion Effect Of Guarantee Circle From The Perspective Of Social Capital

In order to ease the financing constraints,private enterprises will obtain development funds through a variety of channels.On the one hand,private enterprises improve their credit rating by means of mutual guarantee,so as to obtain enough bank loans;on the other hand,various forms of private lending have injected blood into thee development of private enterprises.The formation of guarantee circle makes enterprises have more social capital,deepens thee connection between enterprises and social network,and brings certain financing convenience to enterprises.However,mutual guarantee and private lending can not only ease the financing constraints for private enterprises,but also bring greater risks.The developed social network makes the relationship between enterprises close.The default risk of an enterprise’s loan will be transmitted to many enterprises with which it has a guarantee relationship;while the enterprises involving private lending will face the risk formed by financial fraud,platform collapse and other uncertain factors,which will be transmitted and spread through the network chain in the guarantee circle.Therefore,for those enterprises involved in private lending in the complex guarantee network,the default risk of a single enterprise is likely to be magnified under the effect of the guarantee circle,and eventually lead to the risk of the whole guarantee circle.Based on the above background,this paper combines theoretical analysis with case analysis.Firstly,this paper defines the three core concepts of social capital,private lending and guarantee circle,and defines the three analysis dimensions of social capital:relational dimension.structural dimension and cognitive dimension.Through the analysis of the role of social capital and the behavior of enterprises in the guarantee circle.it is found that under the structural dimension.enterprises in the guarantee circle will produce excessive credit:under the cognitive dimension.enteiprises will produce certain opportunistic behavior:under the relational dimension.the guarantee circle has played a role in easing the financing constraints faced by enterprises.On this basis.it makes a theoretical analysis of the amplification effect of Guarantee Circle on private lending risk.Secondly.through the analysis of the case of "Hailong Guarantee Circle".it is found that Shandong Hailong.the core enterprise of "Hailong Guarantee Circle".is facing a huge guarantee risk.and the total guarantee amount of the enterprises in the guarantee circle is far beyond the bearing capacity of the enterprises.Moreover.the affiliated enterprises of Shandong Hailong.the core enterprise.also involve a large number of private loans while carrying out mutual insurance which leads to the poor risk resistance ability of enterprises in the Guarantee Circle under the impact of the financial crisis.Therefore.this paper combs the formation of Guarantee Circle.risk accumulation and risk outbreak process in detail.Although the core enterprise Shandong Hailong reluctantly maintained its business by continuing to expand the guarantee loan.it finally went bankrupt and restructured because of the overall downtum of the industry and the debt crisis of mutual insurance enterprises.After that.through the calculation of Shandong Hailong’s social capital index.it was found that Shandong Hailong had rich social capital and complex social relations The default risk index finds that it is always at the high risk default level.Therefore.this paper combines the theoretical analysis and case analysis to draw the conclusion that the high level of social capital intensifies the behavior of mutual insurance between enterprises,which makes enterprises face huge guarantee risk.On the other hand,the private lending behavior of a single enterprise will also affect other enterprises through the developed guarantee network,and eventually lead to the risk expanding to the whole Guarantee Circle,causing a large-scale risk outbreak.Finally,from the perspective of social capital,this paper puts forward three risk aversion strategies:restraining excessive credit,narrowing the cognitive dimension differences of enterprise managers and avoiding the dependence of enterprises on social capital.