The Impact Study Of Corporate Social Capital On Financing Constraints

Small and medium-sized enterprises (SMEs) occupy a pivotal position in thedevelopment of China’s economy. However, SMEs possess extremely limited financialresources, and financing constraints are the biggest problem that enterprises are facing. Theexisting studies focus on the factors of enterprises themselves such as firm size, ownershipstructure and external macro factors such as financial development, the legalization process.Although some scholars began to focus on the impact of a single social network relation onfinancing constraints, such as political connections and bank connections, but few scholarsconduct the research from a point of view of corporate social capital, which covers allsocial network relations of enterprise and other stakeholders. Therefore, the study on theimpact of financing constraints on corporate social capital of SME based on an empiricaltest could provide a new perspective to the study of the problems of SME financingconstraints and empirical basis.First, this study goes through all the relevant domestic and foreign theory of corporatesocial capital and financing constraints, and theoretically analyzes how corporate socialcapital influences SMEs’ financing constraints. Second, it selects the listed SMEs assamples, and then using a corporate social capital index system constructed by the differentdimensions of corporate social capital, calculates the corporate social capital index byprincipal component analysis. Last, it employs the Cash Flow Sensitivity of Cash Model toconduct an empirical test, whose results conclude that social capital of corporate caneffectively alleviate financing constraints of SMEs, especially in less financially developedregions.