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.