Social Capital And Financing Constraints Of Small And Medium-Sized Enterprises

Since the reform and opening up,small and medium-sized(SMEs)play an important role in promoting economic growth,technological innovation,increase taxes,creating jobs,improving people's livelihood,which is the core force to promote the economic and social development of China healthy.Nevertheless,due to the current bias of banks and other financial institutions on SMEs and SME's own deficiency,such as:small in scale,low credit,fragile anti-risk ability and so on,SMEs face more serious financing constraints than state-owned enterprises.The current problem of financing SMEs has aroused widespread concern in academic circles,they carry out their research respectively from external macroeconomic factors,such as economic development,financial liberalization,market-oriented process,the institutional environment,and internal factors,such as enterprise scale,management level and profitability.Some scholars have begun to take micro-level political contacts,the relationship between banks and enterprises,industry clusters and other single social networks into of their research and re-examine the issue of financing constraints for SMEs,but few scholars explores the impact of differences in regional social capital of financing constraints of SMEs from macro perspective.In this paper,we use two dimensions—the number of social organizations and trust of social capital to measure the development of social capital in various regions of China,and then to study the role of social capital in easing financing constraints for SMEs.In this paper,through taking social capital as a factor into Euler equation investment model,based on listed companies of Shenzhen Stock Exchange between 2005 and 2010 as samples,we systematically studied the dynamic effects of different dimensions of social capital on financing constraints of SMEs.This empirical test shows:(1)The investment of SMEs in China is significantly positive to cash flow,so there exists obvious financial constraints phenomenon;(2)Social capital helps to ease financing constraints for SMEs,and the effect of impacts on financing constraints for SMEs of different dimensions of social capital differs:trust can significantly alleviate financial constraints of SMEs in China,but the impact of non-governmental organizations are not obvious;(3)The relieving impact of social capital on financial constraints of SMEs depends on level of institution:in eastern coastal areas with high level of institution,the effect of social capital is not significant,but in inland areas with weak institution,social capital is significant for relief of financing constraints of SMEs.