An Empirical Analysis Between Bank-firm Relationship And Financing Facility And Corporate Growth

This paper attempts to study the bank-firm relationship between the banks and the SMEs empirically. With the date collected from the SMEs board on Shenzhen stock exchange, this research discusses the influence of well relationships to corporate credit availability and growth. The loan data and development status comes from the prospectus of listed companies. In the empirical model, I add some characteristics of the borrowing enterprise about the financial and governance situation, such as total assets, cash flow, tangible assets ratio, age, state-owned, industry, money policy and regional financial environment. We want to strive to get a comprehensive analysis about the influence of well relationships to corporate credit availability and growth from different angles.Our results show that the numbers of enterprise’s signing with banks, years of long-term loans, bank credit loans has positive effect to enterprises’credit availability. The longer enterprise exists, the easier it gets loans. Enterprise which has higher profit has less bank debt. Because in the process of cooperate developing, not only their own internal finance ability enhance, but also can find other financing channels. On the one hand, more banks signing with enterprise can enhance the ability of enterprise external financing; on the other hand, it will drive up the cost of finance. So SMEs need to seek a balance between credit availability and inducing financial costs with constantly practice.According to the empirical conclusion of the influence of bank-firm relationship to firm growth, enterprise with the stronger power of major bank has worse performance. However, enterprises with more signing banks do better. If the SMEs obtain excessive lending, it may produce over-investing behavior, and then lead to high interest expense.Because the SMEs have single financing option, they are more reliant on bank loans. So they always maintain relationship with banks actively. Statistic results show that the duration of long-term loans for non-state-owned enterprises growth has a significant positive effect.SMEs are the important force of China’s national economy and social development. Promoting the development of SMEs is the major strategic task. Under the background of2008financial crisis, commercial banks faced money supply capacity constrain. And in view of the SMEs risk considerations, banks appear "stint lend" phenomenon; leading to the financing difficulty of SMEs. For research conclusion of this article, I discuss how to reasonable development the fact relations, make it become the bank and enterprise win-win mode and puts forward Suggestions on the development of mutually beneficial.With research conclusion of this article, I discuss how to develop the reasonable bank-firm relationship, making it become the bank and enterprise win-win mode.First of all, we encourage the SMEs to develop the relationships with banks, not only lending but also settlement relationship. With the circumstances of financial system reform, it’s necessary to strengthen the participation of banks to SMEs, through the first trial bank the proportion of shareholding and promotion step by step.Second, companies can hire person who has a rich bank experience as financial director. In the aspect of Personnel quality, banks should strengthen the loan officer’s professional knowledge training. They also can classify the enterprise industry, and distribute professional loan officer to make long-term tracking of different industry of SMEs.Finally, in the process of market-oriented reform, our government should ease banking access standards actively, and promote regional development of small and medium-sized financial institutions like village banks, loan companies, funds support community orderly.In addition, it is important to set bank credit quit mechanism and develop the capital market. Small and medium-sized enterprises comply with the trend to take a chance to establish good relationships with banks, and settle a good foundation for their future development.