Research On ISME Growth, Financing Constraints And Credit Strategy

With the acceleration of economic globalization, the competition of innovation capability charactering independent innovation has been the dominant factor in the worldwide competition. Innovative Small and Medium-Sized Enterprises (ISMEs), as the micro carriers of national economic development, are becoming the important force in construction of national innovation system, with strong innovative motivation, professional innovative technology and flexible growth mechanism. ISMEs, who occupy small proportion in whole enterprises, create the most new technology, new products and new patents. Meanwhile, they play important role in optimizing the industrial structure, driving the birth of high-tech enterprises, and promoting technological innovative development. However fund shortage and external financing difficulties have never been relieved for ISMEs effectively. In the financial crisis and post-crisis, the above faults have been growth bottleneck of ISMEs, and also restrict seriously enterprise survival and long-term development. Based on the organism characteristics of ISMEs growth, according to growth evolutionary mechanism and coevolution mechanism of bank-enterprise credit, bank-enterprise credit financing system establishment matching the growth of ISMEs will provide new perspective for solving financing constraints of ISMEs, also have important practical significance.With bounded rationality acting as the hypothesis, evolutionary economics embed complex system theory in the analysis framework on innovation, choice, and diffusion. It pays close attention to long-term dynamic evolution of continuous and complex enterprise growth system, the possibility of non-optimal behavior for enterprise. Also, it fit study requirements of ISMEs as complexity organism, with evolution game theory analyzing strategic interaction of evolution between subjects. But theory system of evolutionary economics is extremely confused; study of ontology and methodology is still variegated in theory competition, especially the study of evolutionary theory use in financing problem of enterprise growth is still weak. So it remains to be deepening, how to construct evolutionary analytical framework of financing constraints for ISMEs, how to resolve the evolutionary mechanism of innovation and growth of ISMEs and commercial bank credit, how to reveal evolutionary process and stable strategy of credit game between banks and enterprises, how to promote the enterprises to realize the sustainable growth. Thus, this paper studies financing constraints and credit strategies of ISMEs from bank-enterprise evolutionary view with evolutionary idea as the main logical line. The main content includes the following aspects:Basic definition and evolutionary framework construction of ISME growth rules and financing structure:The paper defines basic problems of growth of ISMEs and analyzes financing structure and financing needs in different stage basing the difference between ISMEs and traditional SMEs.Then, the paper analyzes credit cooperative relationship between banks and ISMEs and forms analytical framework of evolutionary economicsAnalysis of financing constraint for ISME growth:Based on statistical analysis of data, the paper describes the status and financing problems of ISMEs at the present stage, analyzes financing environment and bank-enterprise relation of ISMEs and reveals the root of financing constraints in the ISMEs. Meanwhile, with ISMEs listed in SME board and growth enterprise board as sample, it is empirically checked for the effect of commercial bank development on financing constrains of ISMEs and thus the growth of ISMEs,Evolutionary mechanism of ISME growth and commercial bank credit:Using evolutionary economics theory and complexity system method, the paper analyzes evolutionary behavior and strategies in ISME growth and credit innovation of commercial banks, and puts forward evolutionary way and approach between them. Following it, this paper explores coevolution and interaction structure between ISMEs and commercial banks with coevolution theory.Evolutionary game and credit strategies between ISMEs and commercial banks: According to evolutionary game theory, the paper builds up credit evolutionary game model between ISMEs and commercial bank, reveals basic evolution law in the credit behavior between bank and enterprise and puts forward credit stable strategy. On this basis, the part optimizes the models and explores the effect of the introduction of government policy support and credit guarantee agencies on bank-enterprise credit cooperation.Evolutionary simulation of bank-enterprise credit financing system:Based on evolutionary mechanisms and game models, the paper puts forward the modeling and simulation steps, and constructs simulation models on credit evolution between ISMEs and commercial banks. At the same time, Dynamic evolutionary process is imitated in different evolutionary conditions between ISMEs and commercial banks.Based on the above analysis, the following five conclusions are yielded:First, growth connotation, growth characteristics and growth patterns are reconstructed from enterprise evolutionary view by compositing the essential differences of ISMEs and traditional SMEs. Then, the paper establishes the evaluation and prediction model of ISME growth using the comprehensive evaluation and neural network methods. Basing on this, the paper forms financial growth cycle of ISMEs.Second, the paper tests the relation between commercial banks and financing constraints of ISME growth by empirical methods with the sample of ISMEs in China. The empirical results show that, the higher cost of external financing causes the higher degree of ISMEs'financing constraints; the development of commercial banks and level of bank competition have positive relation with credit availability of ISMEs; Improving commercial bank credit system helps to reduce information cost and regulatory cost between banks and enterprises, increase financial support for ISMEs and promote the sustainable growth of ISMEs.Third, the paper constructs the evolutionary mechanism of ISME growth and the self-organization evolutionary mechanism of commercial bank credit innovation in many aspects of evolutionary elements, evolutionary path and evolutionary process using evolutionary economics theory. Meanwhile, the paper presents that under the coevolution condition of business innovation and the external environment, how to match business innovation rate and the degree of bank credit support is the key for ISMEs to achieve sustainable growth.Fourth, evolutionary game models between commercial banks and ISMEs reveal several important results. Although both banks and enterprises have the tendency to imitate the high profit strategy, ISMEs can resist few companies'breach of contract. ISMEs in R&D and pioneering period suffer the highest degree of financing constraints. So commercial banks build up the credit relation with innovative SMEs only if enterprises'project success rate is higher than minimum lower limit value. Bank-enterprise credit stability has to depend on the mutual restriction of endogenous factors and external strength including government and financial intermediaries. Therefore, we further establish the evolutionary game model of bank-enterprise credit financing system based on the multiple structure. The results of multivariate model indicates that bank-enterprise credit financing system will form the evolutionary stable strategies eventually with government policy support system and bank supervision mechanismFifth, evolutionary simulation of bank-enterprise credit financing system shows that ISMEs and commercial banks will reflect on the original strategies in the long-term credit evolution and reach an evolutionary steady state gradually. Meanwhile, enhancing enterprises'innovation success rate has a positive role in the promotion of bank-enterprise credit cooperation. Commercial banks should set reasonable regulatory cost based on bank size, enterprise conditions and expected return. Moreover, bank-enterprise cooperation strategy is dominant and reaches a stable equilibrium in a shorter period of evolution.The paper constructs the evolutionary mechanisms and credit evolutionary game models of ISMEs and commercial banks from complex dynamic perspective based on evolutionary economics and evolutionary game theory, which breaks through the mechanical static limitations under the rational and balanced assumptions. According to it, innovation points of the paper are as follows:First, the paper defines the basic problems of ISMEs growth and establishes evolutionary analysis framework of bank-enterprise credit financing. Based on evolutionary theory view and system science thinking, the basic concepts of ISME growth is reconstructed using businesses bionics theory, evolutionary economics theory, evolutionary game theory and complex adaptive system theory. On this basis, the paper builds the analytical framework of bank-enterprise credit financing from the perspective of group evolution by illustrating the root of financing constraints in the development of ISMEs, which provides meaningful reference to the study of ISME growth and financing problem applying evolutionary theory.Second, the paper analyzes evolutionary mechanisms and forms multi-level coevolution mechanism and interactive selection mode between commercial banks and ISMEs. Considering the diversity, heterogeneity and mutual feedback of banks and ISMEs, we apply evolutionary economics theory to investigate evolutionary way and process of ISME growth and commercial bank credit innovation, and identify coevolution mechanism from macro-view, medium-view and micro-view. Then, interactive structure and selection mode are formed between banks and ISMEs in three dimensions of firm growth stage, credit innovation stage and credit availability.Third, according to theory complementarity, financing constraints problem of ISME growth is discussed systemically by evolutionary economics and evolutionary game theory. Evolutionary game theory compensates for lack of evolutionary economics theory in the aspect of strict mathematical model. Based on the theoretical deduction of evolutionary economics, we study the credit relation between banks and ISMEs and the evolutionary rule of credit financing system using evolutionary game, and explain evolutionary process of credit cooperation, credit strategy selection, and support function of government and guarantee agencies, which put forward the new research approach about revealing the financing problem of ISME growth.Fourth, bank-enterprise credit stable strategies are put forward based on the innovative conclusions of evolutionary game and simulation. This paper shows that the root cause of ISME financing constraints involves the lack of both corporate innovation mechanism and management mode, the lack of bank service awareness, and also the lack of national innovation policies. Thus, we raise the effective credit strategies from the perspectives of enterprises, commercial banks, government, and guarantee agencies combining with evolutionary trend and evolutionary stability of game models, which provides new practical basis for defusing financing constraints of ISMEs and promoting their sustainable growth.