The role of government in helping SMEs to access finance: An evolutionary game modeling and simulation approach

Zhu Mei, Jingjing Zhang and QiaoMei Zhou

PLOS ONE, 2024, vol. 19, issue 12, 1-31

Abstract: Purpose: This study aims to delineate the operating system of a strategic game model involving three core financial actors—government, banks, and guarantee institutions, with a focus on their collective impact on system evolution towards sustainable SME financing. Methodology: Utilizing numerical simulations informed by dynamic equation constraints and optimal equilibrium states, this paper abstracts the strategic behaviors of system constituents, constructing a game model to predict and analyze system evolution within various operational contexts. Results: The simulation experiments reveal the critical role of quality risk information and responsible actor behavior in maintaining low default rates and fostering a sustainable financial system. System trajectories under various scenarios highlight the fragility of the equilibrium and the necessity of concerted, strategic cooperation among all stakeholders. Conclusions: Findings underscore the importance of a cooperative, conscientious approach by government, banks, and guarantee institutions to ensure a robust and sustainable SME financing environment. The study advocates for strategic policy guidance, emphasizing the interconnectedness of institutional roles and their cumulative effect on system stability.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0315941

DOI: 10.1371/journal.pone.0315941

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