Relational Financing And Enterprise Capital Chain Security

In recent years,LETV,a company with the highest market value of the Second-board Market at one time,has been on the top of financial news several times due to its endangering capital chain.Yueting Jia,the founder of LETV,although ultimately failed to save LETV,successfully raised funds from his relatives,fellow –villager,alumni,colleagues and other social relations,to temporarily alleviate the capital chain rupture.In addition,many companies,such as Mengniu?Hanting Hotel and Ctrip,choese to use Relational Financing when the capital chain rupture.So,what is the impact of the Relational Financing on the security of the capital chain?At present,domestic and foreign scholars mainly form three perspectives to investigate Relational Financing and their effects:political connection,bank enterprise association and director network.While the research on capital chain mainly focuses on the risk of rupture and countermeasures.What's more,there is a little literature to study the relationship with the security of the capital chain and lack of relevant case studies.Hence under the premise of summarizing the relevant research results at home and abroad,this paper adopts case research method and normative research method.By combing the relationship financing of LETV,this paper studies the mechanism of Relational Financing has on the security of capital chain.It is found that,in the short term,Relational Financing can provide a guarantee for the security of capital chain when it is tense.When the capital chain is normal,Relational Financing can bring low risk and low cost capital to the company.But in the long term,the availability of Relational Financing makes company more rely on them,which may lead the company to ignore the business performance or to cause blind investment,Such a situation could cause certain harms to capital chain.What's more,Relational Financing plays an important role in the capital chain in the company which is in the growth stage.When companies are in period of tight monetary policy,the Relational Financing has a stronger effect on the security of capital chain than those who do not.