TITLE:
An Empirical Study on the Impact of Guanxi and Trust on External Financing Efficiency in Clusters
AUTHORS:
Lan Wang
KEYWORDS:
Guanxi, Trust, Information Symmetry, Efficiency
JOURNAL NAME:
iBusiness,
Vol.7 No.1,
March
2,
2015
ABSTRACT: Financing is a critical
bottleneck problem in the development process of SMEs. SMEs’ business activities
are more closely embedded in the network, because the geographical location
closeness facilitates the exchange of information and the diffusion of knowledge.
We try to explore how the cluster network relations affect the efficiency of SMEs
external financing efficiency. This paper takes a close look at firm financing
patterns and factors that influence external financing performance of SMEs in
clusters. However, our results suggest that financing from bank is the main financing
pattern. We also find inter-firm trust is positively related with external
financing efficiency and this positive relationship is moderated by the level
of Guanxi. Theoretical and managerial implications are discussed.