Dynamic Game Analysis Of The Indirect Financing Of SMEs In The Period Of Transition

The issue of financing of small and medium enterprises (SMEs) is both a worldwide problem and a long-term issue. Besides the general reasons that existing in the market economy, the problem stands out in our country because of defects of our financial system during the transition from a planned economy to a market one. To establish a financial system to support SMEs efficiently and eliminate those difficulties of SMEs' financing is a great issue for impelling the process of marketization in China.In view of this, some scholars believe that state-owned commercial banks should alleviate the financing difficulties through the conversion of internal management mechanisms, while other scholars argue that the development of the small and medium-sized bank should effectively solve their financing difficulties, the latter view is supported by the paper.Under the macro background of our country's transition, the paper based on the existing and relevant research gives an analysis about the relationship lending and arm's length lending for SMEs through establishing dynamic game models of bank-enterprise relations, and proves that relationship lending should take an effective settlement of SMEs' indirect financing difficulties with considering the benefit of banks and enterprises. On the one hand, the relationship lending is conducive to the establishment of new bank-enterprise relations, strengthens the control of risk and ease the information asymmetry between bank and SMEs. On the other hand, the relationship lending is conducive to resolving the financing needs of short and long term and promote the development of SMEs. With the gradual deepening of the institutional transformation, in the view of SMEs' indirect financing problems: in the short term, China is in the dominant economic patterns of relationship economy and the relationship lending is well fit for the feature of times; In the long run, with the continuous extension of "the extended order of human cooperation", China will inevitably convert into the main economic patterns of contract economy, the arm's length lending will become a major financing method of that times.In order to ease the bank credit rationing and to unblock the indirect financing channels for SMEs, we should be adopted to encourage the development of small and medium-sized regional joint-stock banks that can effectively solve the information asymmetry and the high transaction costs. In view of Japan's main bank system, we must adjust policies and regulations to further improve bank system that is conducive to the relationship lending for SMEs, and enhance SMEs' capacity of accumulating capital.