Abstract: Most of the SMEs in industrial clusters use mutual guarantee mode for their financing. Successful financing not only provides opportunities for the development of innovation of the SMEs themselves, but also promotes the transmission and upgrading of their industrial clusters. In this paper, a signal transmission game model is put forward to tackle the adverse selection problem existing in the financial process of SMEs in industrial clusters. After analyzing the separating equilibrium, the results show that: guarantee companies should set up an effective security mechanism, that can reduce the investment amounts F₁ for companies with high-yield ability when they join to the guarantee projects, increase the investment amounts F₂ for those with low-yield ability, and raise the guarantee ratio n₁ for high-yield companies. Besides, SMEs in industrial clusters should strive to improve their earning capability θ, to widen the gap of θ₂ from the low-yield companies as much as possible.

Key words: industrial cluster, SMEs, guarantee financing, game theory