Research On The Relationship Between Financing And Growth Of SMEs

Small and medium-sized enterprises (SMEs) play an important role in the development of national economy. However, SMEs are also facing many difficulties in the growth process. In recent years, the government has adopted relevant policies and measures to further increase the tax credit to support SMEs and improve the production environment, which have positive changes on the business of SMEs. However, the problems are not completely resolved, the situation of the development of SMEs is still very grim. Especially, the problems of financing and guarantees difficult are still very prominent. How to help SMEs solve economic difficulties, so that SMEs could change their mode of development, especially in how to effectively solve the remove the financing difficulties, financing obstacles, improve financing efficiency, are important and urgent tasks. In this paper,we use Chinese industrial enterprise database to examine the financing and development of SMEs from the perspective of ownership. In particular, we examine the financing mode, financing efficiency, financing structure, as well as the relationship between the SMEs financing and growth.First, we review the existing research about the financing and growth of SMEs, and we clarify the concepts of financing mode, financing structure, financing efficiency,enterprise growth, enterprise life cycle, and enterprise finance growth cycle, and we analyze the influence factors of financing mode, financing structure, financing efficiency, and the logical relationship between financing of SMEs and the growth of SMEs. Based on the above analyses, the theoretical foundations of the empirical analysis are laid.Second, through a large number of statistics survey and statistical data analysis,this study reveals the situation of development and financing of SMEs in China,including the distribution of the number of SMEs, industry distribution, development policy system,the characteristics of financing,financing mode and financing structure and so on, and financing difficulties of SMEs are described. And then, we investigate the financing situation and development policy for SMEs of the United States and Japan,and through the comparative analysis of the development of SMEs in the United States and Japan, the inspirations to the development of SMEs in China are given.Third, using the sample of SMEs in Chinese Industrial Enterprises Database(including more than 70 million enterprises in the last ten years), we further analysis the industry distribution, regional distribution, ownership distribution and their change trend. Then we construct the evaluation index system of SMEs in China, and calculate the financing efficiency of SMEs using data envelopment analysis method, and analyze the trend of financing efficiency across the different industries,different regions,different ownership, and their differences.Fourth, we analyze the financing structure of SMEs using panel data models and propensity score matching method. Specifically, ownership discrimination of indirect financing are examined, i.e., the differences of indirect financing between different ownership of SMEs are examined. The empirical results show that state-owned enterprises enjoy the advantages of indirect financing and other enterprises compared and certain ownership discrimination against foreign firms. Compared with private enterprises in the advantages of indirect financing and other enterprises. However,private enterprises indirect financing rates below state-owned enterprises, which in a certain extent reveal all of discrimination.Fifth, based on the above analysis, the financing efficiency, financing structure and growth of SMEs are brought into a uniform framework. We construct the growth model,efficiency model and structure model for SMEs, and investigate the relationship among financing efficiency, financing structure and growth by the system GMM of dynamic panel data models. The results show that the financing efficiency and growth as well as the financing structure and growth are influence each other, the financing efficiency will affect the financing structure, not vice versa. For state-owned enterprises, there is no direct relationship between growth and financing structure, but both of them have a two-way influence with financing efficiency; for the individual holding enterprises,financing efficiency and enterprise growth are influence each other, but only one-way impact from financing structure to grow and financing efficiency are found; for the foreign holding companies, growth, financing efficiency and financing structure are influence each other.Finally, policy recommendations of the financing and development of SMEs in China from the view of the government, financial institutions and SMEs themselves are given.