A Study On Corporate Financing Behavior From Social Capital Perspective

Corporate financing behavior is the key issue of the research on the theories ofmodern corporate finance. Reviewing the history of the develpoment of Chinesecorporation finance theories, finance theories in our country are just subservient to theaccounting due to the lack of capital market as the basis and focus on the study ofspecific financial activities before the reform and opening up. After the reform andopening up, with the development of the economic system and the establishment ofthe capital market, our country’s finance theories begin to be independent ofaccounting gradually, but basically they imitate the theories of foreign mature capitalmarkets, whose research viewpoints and the conclusions have a relatively largedisparity from reality in China. Especially in the aspect of corporate financingbehavior, our country’s finance theories have a big difference from the financetheories of foreign mature countires and they form the financing behavior “vision”with Chinese characteristics.The explanation of foreign classic financial theoriesabout Chinese corporation financing behaviors suffers a huge challenge. Therefore,how to learn the international experiences of research methods that are generallyaccepted,research and explain the financing behavior with Chinese characteristics hasbecome the major issue wihch financial circles in China face with urgently.Althoughcorporate financing behavior manifests as the movement of the monetary fund,itrepersents a kind of social relationship,to a deep degree.It depends on a kind of socialmechanism.Especially in the transformation period of Chinese economy, legal systemand the financial system are not perfect.The social relationship becomes themainstream way of resource allocation. Corporation financial behavior represents acertain sociality. Social capital theory which focuses on Social relations and socialnetwork may be a breakthrough on the study of finance theories with Chinesecharacteristics.This paper first discusses the formation conditions of social capital and theprocess of its evolution.Second, from the prospective of the effect of ability inenterprise’s access to resources, this paper constructs enterprise social capital index,and verifies the validity of the index design.Third, it analyzes the action mechanismof the social capital on the enterprise financing behavior and reveals the effectapproach. Finally, on the basis of theoretical analysis, it uses empirical tests of theinfluence of social capital on financing behavior of the enterprise and verifies the effectiveness of firm’s financing behavior. Specifically, the conclusions of this paperare as follows:(1)Social capital formation and its stability analysis. It analyzes the social capitalformation and evolution,via evolutionary game theory and dynamic game theorymethod,and plus, the the final equilibrium in appropriate and initial conditions,thusfinding out the conditions and strategy that promote enterprise social capitalformation.(2)The construction of corporate social capital index.Regarding enterpriseproduction method and the management level as the main line, from the prospectiveof the the effect of ability in enterprise’s access to resources,it establishes enterprisesocial capital index system based on public financial data.Then with the variationcoefficient method, it constructs the social capital index of enterprise. Shanghai ‘s andShenzhen’s a-share listed company from2004to2010is cited as an example tocalculate the listed company social capital index. The empirical tests of the continuityand stability features of enterprise social capital are used. Meanwhile, it illustrates thereason why there is a large disparity of the social capital as well as a overall low levelamong our listed companies in China.(3)The action mechanism that social capital impacts on corporate financebehavior. According to the characteristics of social capital,from the prospectives ofsocial networks, trust, and social norms,it analyzes action mechanism of that socialcapital impacts on corporate finance behavior, blending the distinctiveness of socialcapital into the financing behavior of enterprises and adopting the dynamic gameanalysis methods to deduce the degree of information asymmetry of social capital insettling the problems rising during the corporate finance process.Therefore,itfunctions as a way to prevent from moral hazard for its reduction in the transactioncosts of both lenders and borrowers.(4)The substantial evidence verifies the relationship between social capital andcorporate financing behavior, which also tests the effectiveness of corporate socialcapital financing behavior. It examines,with the method of multivariate statisticaladoptted,the influence social capital brought to financing constraints, financingcapacity, financing options, debt maturity, as well as the credit financing. Exploringthe universal law of corporate financing behavior in a large sample study, this articlefound that social capital can significantly enhance corporate financing capacity,shorten the debt maturity, motivate enterprises to opt debt financing, etc., which all strikingly lessen corporate financing costs,and boost financing efficiency.