Abstract

The social capital, different from other types of resources, is generated through continuously inheritance and accumulation. Accompanied with internet development and impact by big data era, the social capital is heterogeneous in the course of accumulation and becomes harder to be copied and replaced. More and more enterprises have been aware of the importance of social capital, acquisition and owning of super strategy ability will be an important way for these enterprises to keep competitive advantage in the fierce market competition environment; besides, “enterprise top management team”is the one who formulates and executes the enterprise strategy while directly determines the company governing efficiency. Therefore, the enterprise top management team is also a core factor of the enterprise social capital development. In Chinese society, it is universally accepted that people should be an integration of social relationship; only a good“social relationship”is established, the enterprise can get a long term development，and even the transnational corporations also have a deep understanding of“relations first”business philosophy during their investment in China. Therefore, the enterprise social capital, in particular to the social capital of the enterprise top management team itself, plays an important role in every operation activity of the enterprise. For any one enterprise or senior executive, its economic behavior is also embedded in the social relationship and social structure itself, and must certainly be impacted by the social relationship structure itself. However, the modern enterprise financing theory often ignores the“social embedability”of the enterprise financial behavior, which is an important defect of thinking pattern.

It is noteworthy that listed companies on GEM are short in listing time，small in company scale and majored in advanced technology and high growth, this type of enterprises with advanced technology and high growth should be an important source to push our technological innovation and economical development. Since the available external resources of the GEM companies are limited and information asymmetry with financing institution is serious, the most of them are still often restricted by high financing cost, low financing amount and the like during the external financing process because of the background of private enterprises, and thus the enterprise demand is hard to meet. Under this circumstance, the social network of the top management team is wider, and external resources provided for the enterprises are correspondingly more; their social capital can bring a huge resource effect to the enterprises. Therefore, this paper holds that the type of private enterprise having operation strength in capital market is in urgent need of social capital resources to solve the financing problems.

Different types of top management social capital are always concerned by all sectors of society, but the social capital generated by the link of the top management with government, bank, chamber of commerce and other organizations in our country has a huge difference. The core problem of the paper is to clear the vein of the influence of the top management social capital of the GEM companies on company financing cost, and make clear whether the top management social capital is good for reducing the company financing cost; subsequently, respectively measure which kind of top management social capital has the most obvious effect on debt financing cost and the equity financing cost, and what is the difference of both impact effects.

In order to solve above problems, this paper intends to comprehensively apply the social capital theory, resource dependence theory, signal transmission theory and reputation mechanism theory and adopts the analysis method with combination of economical, financial management and social factor, to build up a top management social capital index system at first, divide the top management social capital into cross, longitudinal and network dimensions，and hereby deeply investigate the impact effects of the political connection，financial connection and reputation of the top management on company debt financing, then discuss the restriction effect of micro-factors（state-owned stock right and bank-enterprise relationship）and macro-factors（system environment）therein, and finally structure the study model of the top management social capital on the impact effect of company financing cost through analyzing the function mechanism of the top management social capital on company financing cost, and discloses its“black box”that the top management social capital influences on the company financing cost upon the logical deduction by reasoning and empirical study. Through introduction of the concept of the top management social capital, this paper analyzes how does the financing cost of the GEM enterprise is impacted in the social network; it is in important theoretical and realistic significance for our entrepreneurial enterprise to better use the social relationship network resources inside and outside the company in future and improve the enterprise competitive capacity；besides, it also has important reference significance in the financing behavior decision of the enterprises in future.

This part includes research background and significance, research concept and method, paper structure and introduction of innovative point.

The study is divided into seven chapters：

Chapter Ⅰ:In troduction.

ChapterⅡ:Theoretical basis. This part is to perform concept definition and measurement on our top management social capital at first, logistically organize the main body content of this paper, and then sets up a theoretical platform in accordance with the financing theory, signal transmission, resource dependence, reputation mechanism, relationship financing and other basic theories, so as to provide the theoretical support to the later analysis of influence mechanism of the top management social capital on the financing cost.

ChapterⅢ:Literature review. In this Chapter, abroad and domestic literatures are mainly reviewed, the subject of top management social capital is tightly focused, and related studies on top management social capital and financing cost are reviewed from the following four aspects:1, related literature of top management social capital;2, related literature review of top management social capital and debt financing;3, veins of related study of top management social capital and equity financing;4, review of related literature summary of top management social capital and equity financing；meanwhile, the existing study is remarked, so as to deepen the understanding of the following empirical study in this paper. Accordingly，this part will conclude and analyze literatures progressively, and systematically and comprehensively describe important theories and literatures involved in this paper, so that a solid theoretical basis is provided for the subsequent study.

ChapterⅣ:Theoretical analysis. The action mechanism of the top management social capital on the company financing cost is analyzed in order to help our GEM companies to scientifically and reasonablyconstruct the top management team. This paper defines the concept of top management social capital in line with the GEM companies, and carries out meticulous classification and elaborate mutual connection, and then focuses on studying the political connection, financial connection and top management reputation index in the top management social capital, and finally investigates the impact of micro-factors such as state-owned stock right, bank-enterprise relationship and information disclosure quality, and macro institutional environment factors in the action of the top management social capital on the company financing cost. The empirical model of the top management social capital established later can provide theoretical basis for the future study as well as guide our listed companies how to set up and maintain the social capital.

Chapter Ⅴ:Top management social capital and debt financing cost. This part aims to study the influence of the informal institution factor on the debt financing behavior of the listed companies on GEM, and carries out the empirical study by taking the data of the listed companies on GEM from 2009 to 2013 as a sample mainly. The study finds that ①the political connection and financial connection of the top management can influence the debt financing cost of listed companies on GEM, but the political connection of the top management can reduce the debt financing cost; after considering about the political identity and the state-owned shares of the top management, the positive impact on the debt financing cost is strengthened; ②Under differentinstitutional environments, the impact of the top management social capital on the debt financing cost is different more or less; in the area with low credibility, the impact effect of the top management social capital on the debt financing cost will be greater; in the area with high credibility, the impact effect of the top management social capital on the debt financing cost will be stronger.

Chapter Ⅵ:Top management social capital and equity financing cost. This part aims to study the impact of the informal institution factor on the debt financing behavior of the listed companies on GEM, and carries out the empirical study by taking the data of the listed companies on GEM from 2009 to 2013 as a sample mainly. The study finds that ①the political connection of top management can impact the debt financing cost of listed companies on GEM; however, after considering about the political identity of the top management and the state-owned shares, the impact direction thereof on the equity financing cost is changed from negative impact to the positive impact.The top management reputation can reduce the equity financing cost, and this impact effect will be significant when the disclosure quality of company information is especially low; ②under the different institutional environments, the impact of the top management social capital may be different；when the government interference is high, the financial marketizaion is low，and level of government by law is low, the impact effect of the top management social capital on the equity financing cost will be greater; besides, in the area with high credibility, the impact effect of the top management social capital on the equity financing cost shall be stronger.

Chapter Ⅶ:Conclusion, Enlightenment and Limitation. This chapter summarized the main study conclusion, study enlightenments and study limitation of the whole paper, looks forward the future study direction.

The innovative points of the study are mainly reflected as the followings：

（1）Clearly specify the concept, level and characteristics of the top management social capital, elaborate links among different dimensions, and structure a relatively perfect theoretical system.

On the basis of formers, this paper improves and builds up the index system of the top management social capital. According to its structure, the system is divided into cross, longitudinal and network dimensions, and applied to the study of company financing cost. On this basis, the top management social capital is investigated from three dimensions below:the first dimension is the cross dimension which reflects the diversity of the top management network relationship; the second dimension is the longitudinal dimension which reflects the compactness thereof and is measured by the identity status of the top management in different organizations; the third dimension is the top management reputation which reflects the credibility there-of. These three dimensions have well measured the ability of bringing resources and opportunities for its own according to the location of the top management in the social network. Three dimensions are tightly linked; if the top management social capital is referred to as a three-dimensional network, the number of the joint linked with it can reflect the relationship breadth-cross according to the location of the top management in the network; a certain distance is existed between the top management and different joints, the distance between the both or the strength and thickness of the linked lines can reflect the relationship compactness-longitudinal; the acting force rebounded by the joint is that the tension of the joint can reflect the relationship impact degree-network（credibility reputation）. Even through the top management will not actively apply additional force, it will enjoy the resources brought by the position where is located in the social network.

（2）Identify the acting path of the different dimensional top management social capitals acted on the different company financing costs, disclose the“black box”of the top management social capital impacted on company financing cost, and enrich the study on the company financing cost based on the social capital theory.

According to the concept definition, the index system of the top management social capital is improved and structured on the basis of the formers，and the index is divided into there dimensions, and an impact effect study model acted on the company financing is structured. Through the model, the internal mechanism of the top management social capital impacted on the company financing cost, difference of impact effects by different dimensions on the debt financing cost and equity financing cost respectively, and restriction in its acting path can be disclosed

（3）Disclosure the function of micro-factors when the top management social capital influences the financing cost, and enhance the understanding the impact effect that micro-factors influence the action of the top management social capital in financing cost.

Specific to the shortcoming that the existing study puts less attention to the impact of the micro-factors in the course of explaining the relationship between the top management social capital and the company financing cost，this study will introduce the state-owned stock right, the bank-enterprise relationship and the information disclosure quality into the study model as the micro factors, and discuss the impacts of these three micro-factors on the relationship between the top management social capital and the financing cost. The study finds that the state-owned stock right has opposite adjusting action in relationship between the political connection of the top management and the financing cost; the bank-enterprise relationship has the promotion effect on the relationship between the financial connection of the top management and the financing cost; the information disclosure quality can be replaced by the political connection of the top management in terms of the impact on the financing cost. It indicates that the impacts brought by the state of the enterprise micro-factors should be concerned at the same time when the different dimensional top management social capitals are used. This study conclusion deepens the understanding of the acting path of the top management social capital on a certain extent.

Key Words:social capital of senior executive; resource dependence; reputation mechanism; state-owned stock right; political connection