Empirical Study On The Trade Credit Financing Management In The Small And Medium Enterprise Based On Network Transitivity Model

Small and medium enterprise is an important part of the national economy, whose development is the focus of government. This thesis builds a model called network transitivity based on the social embeddedness theory, simultaneously analyzing it with knowledge spillover and private benefits, then suggests that knowledge spillover is its nature, relationship embeddedness its drive and private benefit its representation. On this basis, this paper chooses the core triad of organizational financing networks: firms, banks, and trade creditors to measure the network transitivity model with the theoretical analysis firstly and then empirical work. This research investigates how embedded ties and networks between the small and medium enterprise and its commercial bank(s) provide unique financial competencies and resources to the firm that improve its capability for managing trade creditor exchanges. In the theoretical part, there are two aspects: types of the relational capital between the firm and its bank(s) and its affecting mechanism for private benefits formation; In the other part, this study proposes some hypotheses, then applies the factor analysis and multiple regression analysis of the data collected from questionnaires in China to test and analyze the hypotheses. In fact, the quantitative analysis verifies the foregoing hypotheses. We conclude that the duration of a bank-firm relationship and the service degree of multiplexity in the bank-firm relationship are both positively associated with the SME's capability for managing the trade credit financing, and that the size of a firm's bank network is negatively associated with the SME's capability for managing the trade credit financing. Eventually, after some suggestion for improving the relationship between the bank and SME, it is the summarization and prospect of this thesis.