An Theory And Empirical Study On Banks-SMEs Relationship Interface State And SMEs Credit Availability

The small and medium-sized enterprises (SMEs)occupies an important position in China’snational economy, but the problem of financing difficult for a long time also restricts the healthyand orderly development of SMEs. How to solve the financing problem of SMEs is one of theimportant issues has been concerned by scholars. The adverse selection and moral hazard causedby the information asymmetry between SMEs and banks is considered to be the main reason ofcredit rationing suffered by SMEs, how to break the information asymmetry problem isconsidered the key to solve the SMEs financing difficulties. Relationship lending theory isconsidered one of the most important research paths to solve the financing problem of SMEs,this theory believe that the SMEs by establishing an long-term relationship with the banks caneffectively make up for transactional financing base on the hard information and make use ofsoft information to obtain credit from bank and also help to improve the financing efficiency.Study on relationship lending has been relatively mature, but this theory regard relationshipbetween SMEs and banks as a static, single factor one, that only takes the informationmechanism into account.the results that the relationship between banks and SMEs how toinfluence the credit availability and the cost of credit also appeared more inconsistent evencontradiction from empirical study. This shows that the relatinship interface state between SMEsand banks how to influence the SMEs credit availability would be take other factors intoaccount.In addition,SMEs as the main bodys of the financing market will also built strategicallythe relationship with banks, through reduceing dependence on a single bank financing(likereducing the “locking in” problems) to gain credit is an important factor to be considered,therefore the resource dependence theory also has the explanation power for SMEs financing.The financing of SMEs cannot do without the financial market environment, the impact ofrelationship lending mechanism and resource dependence mechanism on SMEs financing wouldbe changes in different financial market environment. Our country has a vast land, the economicand financial market level have wide gap in different regions of the country, provided the basisfor the study on that relationship lending theory and resource dependence theory how toinfluence the credit availability of SMEs in different financial market environment.Based on the above considerations, this paper put relationship lending theory,resourcedependence theory and financing market environment together to research the relationship stateamong them base on previous studies. Firstly, according to the relationship lending theory andresource dependence theory this paper put forward the hypotheses to explore the relationship interface state between SMEs and banks how to influence the SMEs credit availability;Secondly, study the regulation function of the financial market environment as the regulatingvariable on relation between SMEs-banks interface state and SMEs credit availability; Finally,using empirical research to verify the corresponding research hypotheses and based on empiricalresults to put forward advice for easing the financing difficulties of SMEs.The main conclusions of this study were:(1) the relationship interface state of partialrelationship between banks and SMEs can has a positive influence on the SMEs creditavailability, information asymmetry between SMEs and banks is still a major factor that restrictthe financing of Chinese SMEs.Relationship lending is still an important way to relieve theinformation asymmetry, especially in the transition period of China’s financial environment.To acertain extent, relationship lending theory still has very important theoretical and practical valuein solving the financing problems of SMEs in China.(2)The positive relation between creditavailability and relationship interface state of partial relationship between SMEs and banksbecome less under the the action of reducing the dependence in resource dependence theory (3)Under the regulation of the financial market environment, relationship interface state betweenbanks and SMEs have an curvilinear relationship with SMEs credit availability. Resourcedependent theory and relationship lending theory all have influence on SMEs financing, but theeffect size of two theories on SMEs financing depend on the specific financial marketenvironment.The merchanism of reduce the dependence in resource dependence theory has apower impact on SMEs credit avalibality in the developing financing market,while in relativelydeveloped financing market the merchanism of information in relationship lending theory has apower influence on SMEs credit avalibality.Two mechanisms lead SMEs to select the oppositestrategy while building the relationship interface state between banks and SMEs,so thatrelationship interface state between banks and SMEs have an curvilinear relationship with SMEscredit availability.(4) The relationship interface state between banks and SMEs have asignificantly impact on total credit availability, short-term credit availability but no obviousimpact on long-term credit availability, because the bank would more caution on long-term creditfor SMEs. But in general,the relationship interface state of partial relationship between SMEsand banks can improve the credit availability, just the strength of the impact on credit availabilityrely on the financial market environment.