The Research On Financing Predicament And Countermeasure Of Small And Medium-sized Enterprises

Eight years of consecutive economy growth in the United States witnessed the advent of the new economy era as well as confirming officially the decisive role and irreplaceable position of Small and Medium-sized Enterprises. In the Southeast Asian financial crisis, economy systems which are dominated and influenced by Small and Medium-sized Enterprises manifested excellent power to cope with unexpected impact. In the following of that, the effect of Small and Medium-sized Enterprises in social economy has found growing attention from economy domain. Small and medium enterprises served as pillars of economic development and social stability in not only developed countries but also developing countries.The recognition of the important position of SMEs in economy development leads to the value of financing predicament gradually. Perfect financial support system,active and well-developed financial markets and sound laws and regulations in western developed countries combined in efforts to mitigate the financing crisis, whereas in particular China's current development stage of the economy system, financing difficulty which is regarded as bottleneck of the growth of SMEs and the root of restraining economy increment in China is highlighted due to unsound financial support system,imperfect relevant law laws and regulations,unstandardized operation of financial markets and insufficient capacity for development. Just because of that, financing predicament has aroused widespread concern in Chinese and foreign scholars.In the light of the characteristics of China's current economy and the status quo, this paper researches on the status and the underlying reasons of China's SMEs financing difficulties, with an aim to grasping some solutions which is equipped with important practical significance and theoretical significance.The full text is divided into seven chapters; specific structure is outlined as follows: Foreword introduces the background and significance of topics, the structure, research methods and innovation.Chapter I gives a brief review of the fruit of Chinese and foreign researches. There is a reservoir of study concerning the existence principle of SMEs and the causes and solutions of financing difficulties. A large number of facts show that asymmetric information is one of the most important reasons for financing difficulties of SMEs in China. As far as asymmetric information are concerned, domestic scholars carry through the investigation of relevant investment and financing model.Divorced from the context of SMEs, domestic scholars have also carried out further study on investment optimization decision-making model of enterprises.Chapter II outlines financing issues of SMEs, including basic concepts of financing; the definition of SME; status and role of SME in China; financing channels and features of SME; the importance of financing for SME's development; The status quo of financing difficulties in China; Reasons of financing issues which range from enterprises,banks and other financial institutions. These studies are necessary preconditions for this article.Chapter III explores and learns from the successful financing supporting experience of developed countries and regions at home and abroad. In order to wage a comparative analysis in the sphere of laws and regulations, the banking system, credit guarantee and venture investment, we take the United States, Japan, South Korea, Italy and China Taiwan region as reference objects.Chapter IV establishes the quantitative model and outlines the corresponding empirical analysis. As to the empirical analysis of financing structure, this paper apply Kruskal-Wallis H non-parametric test, LSD least significant difference test and multiple linear regression model from the perspectives of industry factors and finance factors. In addition to that, the quadratic regression model of profitability and financing structure aims to explore the existence of optimal financing structure. As to the research on financing channels, this paper visualizes three main financing channels of bank-loaning, commercial credit and non-formal private finance as short-term borrowing, payable funds and other payable funds respectively. By means of constructing multiple linear regression models, on the one hand, we are in an attempt to reveal weighted factors which are valued in the process of granting a loan, providing commercial credit and offering non-formal financial lending; On the other hand, we try our outmost to examine the elements which will be taken into account when making financing channels decisions.Chapter V focuses on the empirical analysis of financing efficiency. First of all, we select net assets yield, total assets yield and return rate of main business as the agent of financing efficiency and apply the ratio of assets to liabilities to financing structure. Taking advantage of regression model, this paper endeavor to measure the rationality of financing structure based on the level of efficiency. Secondly, the employment of hierarchical cluster can find feasible foundation and objective criteria for the improvement of financing environment.Chapters VI and VII must be given prime priority. On the basis of previous research, Chapter VI outlines countermeasures which can cope with the financing plight of small and medium-sized enterprises. We have to not only strengthen financing capacity of SMEs themselves but also create a favorable external financing environment. Chapter VII further demonstrates the significance of credit in our country as well as the prospect and great importance of establishing credit collecting system, credit rating system and the credit guarantee system.Some meaningful conclusions have been arrived at in this paper:I.The outcome of financing structure analysis(I). Industry factor is significant at 95% confidence level. The adjusted R2 equals to 0.234, which signifies that industry difference can account for23.4% of corporate financing structure disparity. In other words, different industry guarantees different financing choice correspondingly. (II) We break down samples into manufacturing industry and information technology industry. Size, investment opportunities and risk-resisting ability are the most prominent factors which influence financing structure. As far as information technology industry is concerned, net assets yield, total assets yield, age, investment opportunities, risk-resisting ability, income tax rates and non-tax liabilities shield which pass through statistical test (95% confidence level), are notable indicator. (III). When the ratio of assets to liabilities reaches 73.41%, the optimal capital structure comes into being and the return rate of main business is 1.2253%. The average ratio of assets to liabilities which is 44.71% brings up a far cry from the optimal financing structure. We infer optimal financing structure (capital structure) will exist, where it is a specific value or a region. Changing financing modes and adjusting financing channels make it possible for enterprises to maximize its profit.II.The outcome of financing channel analysis(I). Serving as two main indirect channels-- bank lending and commercial credit, they have a negative correlation with each other at the significance level 95%. It follows that severe information asymmetry is a stumbling block for obtaining loans from bank. Taken on a form of payment, commercial credit and private finance can be regarded as effective alternatives to bank lending, which to some extent justify the seriousness of credit constrains. (II).In the context of stability test, we find that the impact of payable funds on short-term borrowings outweighs the reverse effect which speaks volumes of serious credit constraints. The fact that short-term borrowing is relatively independent of payable funds reveals preference ranking of financing channel. To put it more specific, commercial credit stands ahead of bank lending. (III). Informal financial can take the place of bank loans and commercial lending effectively, which makes contribution to alleviating the financing plight of SMEs in China.III The outcome of financing efficiency analysis(I). Financing structure acts a negative role in modifying financing efficiency, which give ample signals for weak consciousness of optimizing capital structure, irrational capital structure and financing inefficiency. The situation calls for reducing debt, broadening financing channels and increasing equity funds, in order to improve financing efficiency and elevate company value. (II). Listed companies on the SME board are divided into five levels in line with financing efficiency: excellent, good, medium, poor and bad which make up 11%, 18%, 36%, 18%, and 17% respectively. According to characteristics of different categories, we propose dynamic optimization of financial efficiency.IV. Countermeasure for financing predicamentCommencing on enhancing financing ability of SMEs themselves and creating a favorable external financing environment, SMEs are in a position to eradicate financing predicament as long as they try their best to optimize financing structure, expand financing channels, increase financing efficiency and strengthen signal transmission and signal display mechanism.