Research On The Role Of Finance In The Development Of Government Guiding Funds

Since the government guiding funds were established,the leading and demonstrative effect of which have been strengthened with the increasing proportion.In the structure of government guiding funds,the multilevel relationship of principal-agent has brought about adverse selection and moral hazard problems,which has caused the inefficiency of the incentive mechanism and restraint mechanism of the government guiding funds and then it has seriously constrained the development of guiding funds.The article's main purpose,starting from the point of view of the government and adopting the theory of reputation mechanism,is to explore the thoughts and approach of the inefficiency of the incentive and restriction mechanism in the development of government guiding funds by means of game theory.The reputation mechanism theory arises from repeated games under incomplete information conditions.The KMRW Model is a basic model for the expansion of reputation theory,which has greatly enhanced the ability of reputation mechanisms to solve the incentive mechanism and restraint mechanism problems.This paper clarifies the development of government guiding funds and points out that the inefficient problems of incentive and restraint mechanisms seriously restricts the development level of government guiding funds and attempts to solve these problems by analyzing the role of finance in the development of government guiding funds through the reputation model.Combining the reputation model and the operating characteristics of government guiding funds,the four participants of government guiding funds(government authorities,managers of fund of fund,sub-fund managers,and entrepreneurs)are aligned with the stages of their development(financing,investing,managing,exiting)with the reputation model,through which the behavior of managers of fund of fund in the financing stage,the behavior of the sub-fund managers in the investment stage,the government supervision behavior in the management stage and the behavior of the entrepreneurs in the exit phase were analyzed.This article finally under the guidance of the theory of financial functions points out the general conditions influencing the behaviors of the participating leaders of the government guiding funds in the corresponding development stage and puts forward relevant policy recommendations.Through reputation model,this paper finds that the role of finance in the development of government guiding funds mainly includes the following three aspects: First,financial support should be reinforced to introduce market competition mechanisms to effectively improve the reputation incentive functions of the reputation mechanism.Second,financial supervision should be applied to build the information sharing mechanisms to exert restraint functions of the reputation mechanism.Finally,financial management should be employed to set up a long-term mechanism to bring stable expectations for all participants in the guiding funds with reputation mechanism.