Research On The Impact Of Industry Association 's Guarantee On Financing Capability Of Small And Medium - Sized Enterprises

Adhering to the combination of empirical and normative research paradigm, the paper starts with industry association to study the influence of trade association guarantees have on SME financing capacity.The theoretical analysis of information transmission shows that trade associations credit guarantee system can indeed play a role in increasing credibility, also this can ease the financing difficulties of SMEs. The economic logic in it is that,on the one hand, the unique identity of industry associations contribute to transmission information; on the other hand, industry associations not only has the advantage of information production, but also contribute to exertion of scale economies effect.In the analytical framework of classical Cournot model, the paper discusses how industry associations have inflence on equilibrium premium rate, consumer surplus and social welfare after involving in secured financing secured market, meanwhile, give the preconditions for industry associations to involve in financing secured market.. First of all, the intervention of trade association guarantees can improve the level of competition in the secured market, and enable SMEs to benefit. In the case that secured financing guarantee companies monopolize the market, the premium rate is significantly higher than this involved with trade association and consumer surplus is also significantly lower. Secondly, only when trade association guarantees have significant cost advantage comparing with industry associations,the intervention is likely to enhance the efficiency of guarantee market and, ultimately, succeed in resources Pareto improvement. At this point, it can not only reduce the involvement of premium rates and increase consumer surplus, thereby reducing the cost of financing for SMEs, but also promote social welfare, achieve Pareto improvements of resource.Based on the microscopic research data and empirical result of selection modelresults find that,in many explanatory variables, industry associations guarantee can indeed significantly relieve credit rationing pressure of SMEs, and it is with high statistical significance. In other words, the line Association has information superiority and can increase credibility. And can reduce the cost of financing of SMEs and enhance their financing capacity.For this reason, it is recommended to the bank and the government should pay attention to the role of trade associations guarantee, and select the appropriate opportunity to launch system design trade association guarantees.