Industry Cluster And Small&Medium-sized Enterprise Financing:Empirical Research Based On Zhejiang

Since China adopted the policy of reform and opening-up, its SMEs have stepped into the stage of rapid growth. Gradually, they have become the important driving force that helps alleviate the unemployment pressures, increase taxes and push forward technological progress. Nevertheless, as the Chinese SMEs develop rapidly, they are also confronted with the same problem of transcending the Macmillan Gap faced by their counterparts in other parts of the world. To be specific, they meet with serious difficulty in financing, which hinders SMEs from enlarging their size, developing new products and making technological innovations. Sometimes it even leads to bankruptcy. In this way, the problem of financing faced by SMEs will stop them from constantly playing the dominant role in the national economy, thus impacting on the Chinese economy seriously. As an important and innovative model of organizing production, industrial cluster boasts such strong points as upgrading the credit of SMEs in the cluster, and reducing the financial institutions" risks and costs when providing credit service to SMEs in the industrial cluster. It can facilitate financing for its SMEs. and help them get out of the financing constraint. However, few existing literatures about empirical studies on this issue can be found.In light of this, the thesis, by making in-depth analysis of the credit for SMEs made by the Zhejiang Branch of a large state-owned commercial bank in2004and considering the development of industrial clusters in Zhejiang Province, answers three major questions, from theoretical and empirical perspectives, about SMEs financing efficiency in the framework of industrial clusters:(1) Do SMEs in the industrial cluster have evident advantage in getting bank financing?(2) Is there credit enhance mechanism for SMEs in the industrial cluster? If there is, how is the SMEs’credit enhanced?(3) Is there any difference in the financing scales between the credit-enhanced SMEs in and beyond the industrial clusters? And what is the difference in the financing efficiency?The answers to the above three questions constitute the main conclusions in this thesis:(1) SMEs in the industrial clusters have evident advantage in getting bank financing. To be specific, an industrial cluster pools enterprises with different sizes and types in the same sector, which have evident industrial features. Furthermore, the enterprises in the industrial cluster are on different nodes along the value chain. Duty division and cooperation among them are quite intimate. As a result, it is easy for financial institutions to judge the real operations of enterprising by identifying their position in the value chain, and their transactions and interactions with other affiliates. Thus it is easier for SMEs in the cluster to get bank loans than those beyond the cluster.(2) There is credit enhance mechanism for SMEs in the industrial cluster. First, the value-chain financing, with core enterprises in the cluster as the subjects of risk taking, promotes credit enhancement for SMEs in the cluster; second, the dynamic games on cooperation among enterprises in the industrial cluster promotes credit enhancement for SMEs in the cluster; third, the dynamic games on credit transactions between banks and enterprises in the cluster promotes credit enhancement for SMEs in the industrial cluster.(3) It is easier for enterprises with abundant capital in the industrial cluster to get external financing such as in the form of loans from commercial banks. And the reduction in the number of in-cluster enterprises also helps decrease the amount of external financing for an individual enterprise; the scale effect brought by the overall credit upgrading for the industrial cluster helps enterprises get external financing by enlarging the scope of collateralizable assets on the production chain; the industrial clusters have evidently positive effect on the availability of external financing for in-cluster enterprises and on the range of financing.In all, the thesis perfectly combines theories and empirical studies. From the perspective of industrial cluster, it assorts the governance mechanism and structure of industrial clusters. Based on this, it further discusses about the three mechanisms of SMEs credit enhancement in the industrial cluster while proposing three topics before making empirical proof. The thesis will contribute to existing literatures in the following three aspects:first, it links the governance of industrial clusters with credit enhance mechanism for in-cluster SMEs, which is the first time in the literatures; second, it employs the corporate credit data of a certain commercial bank and proves the three theoretical topics in the empirical way.