Impact of corporate wealth on corporate financing —Corporate wealth is entrepreneurial ability' signal

摘要

To find the root cause why it's more difficult for small and medium-sized enterprises (SMEs) to obtain loans from banks, this paper presents a new credit model from the point of view that corporate wealth is the signal of entrepreneurial ability. The result shows if there is no other mechanism to show the entrepreneurial ability under asymmetric information, Banks' assessment of the entrepreneurial ability is an increasing function of corporate wealth. And moral hazard behavior is more likely to appear by shorten of corporate wealth when the collateral is also shorted. So banks can set higher collateral requirements for SMEs in order to achieve the same expected return. Furthermore, the collateral requirement can be lowered in a relationship financing model, however, if there is no better mechanism other than corporate wealth to reveal entrepreneurial ability in the first phrase, the financing dilemma for SMEs can not be changed.