The financing of science & technology SME: A dynamic game analysis

By building the dynamic four-game model whose main bodies include science & technology SME borrowers, banks, government and security agencies, this article analysis the main bodies' optimal behavior under the sub-game perfect equilibrium in the credit market, and discuss the conditions which need to be reached to achieve this equilibrium. It is shown that the Government's science and technology investment play a crucial role in the micro-financing mechanisms for small and medium enterprises.