Research On The Influence Of Relational Loans On Financing Constraints Of Small And Medium-sized Enterprises

Small and medium-sized enterprises create a large number of employment opportunities and they are an important incubator for technological innovation and entrepreneurial spirit.They are the pillars of national economic development,while facing a long-term financing constraints.Due to small size,a lack of collateral,imperfect financial system,it is difficult to provide hard information which meets the bank credit standards.Meanwhile,it results in more soft information.And relational loans help banks solve the problem of information asymmetry by obtaining the soft information of small and medium-sized enterprises to improve the enterprise's credit availability.Therefore,it is of great practical significance to study the relationship between relational loans and SME financing constraints.To study the relationship between relational loans and SME financial constraints,domestic and foreign researchers mostly base on the mature Investment-Cash Flow Sensitivity model(Fazzari,Hubbard,Petersen,1988,also known as FHP model).But the model is controversial because of the existence of Tobin Q measuring bias and delegate-agent factors.What's more,the bank-enterprise relationship indicators are too single.This paper firstly utilize the Cash-Cash Flow Sensitivity expansion model(Almeida,Campello,Weisbach,2004,also known as ACW model)and study the financial and bank-enterprise borrowing data of the listed companies from 2011 to2015,and adopt multi-dimensional relationship indicators.The length of the firm's relationship(the duration of the firm's establishment),the size of the relationship(the number of the relational banks)and the depth of the relationship(the background of the executive financial practitioners)are included in the model.Whether the relationship loan is effective in alleviating the financing constraints of small and medium enterprises or not,we draw the following four conclusions:Firstly,listed SME(small and medium enterprises)often establish a close relationship with the banks,which can effectively ease its financing constraints;Secondly,listed SME generally encounter financing constraints with a significant positive cash-cash flow sensitivity coefficient;Thirdly,the increase in the length of the relationship between banks and enterprises does not mean that the mutual cooperation increases and the mutual relationship is deepened.The cash-cash flow sensitivity coefficient of product term is not significant;What's more,the more the relational banks,the lower the loan interest rate for an increased bargaining power.The cash-cash flow sensitivity coefficient of product term is significant negative with an eased constraints;Last but not the least,the enterprise with the financial practitioners background of the senior management is much easier to establish a close relationship with banks.The cash-cash flow sensitivity coefficient of product term is significantly negative with an eased constraints.The article finally proposed that the firm should establish cooperation relationship with a number of banks within a certain extent to enhance the ability of bargaining;employ more talents with the background of the financial practitioners to enjoy more resources of loan;the government should improve the multi-level capital market structure and accelerate the pace of development of community banks.