Empirical Study On Financing Efficiency Of Small And Medium Enterprises

Chinese Small and Medium Enterprises (SMEs) have developed rapidly since the reform and opening policy was implemented for more than 30 years. Judging by the data,99 percent of Chinese enterprises are SMEs, which contribute to more than 60 percent of GDP and more than 50 percent of tax revenue. SMEs also provide 70 percent of the import and export trades,80 percent of urban jobs,66 percent of patents and 80 percent of new products. SMEs have become an important force of economic prosperity, employment expanding, restructuring, and the promotion of innovation and industry chain development.Capital is an indispensable factor of production during the SMEs development, and stable and effective financing is an important precondition for the development of SMEs. In the process of China's rapid economic development, capital is mainly invested in large enterprises, major projects and infrastructure while the SMEs' participation is limited. SMEs are lack of financing channels, and the financing is difficult and costly. Meanwhile, the immaturity of SMEs'internal operation and management system lower the efficiency of funds. All of those elements lead to low financing efficiency of the SMEs and affect the long-term development of SMEs seriously.The study mainly includes the following:Firstly, the paper is based on the theory of SMEs financing efficiency. By using the evaluation method of financing efficiency, it illustrates the connotation of financing efficiency, analyzes and generalizes the impact factors of SMEs financing efficiency under the premise of defining the concept of SMEs.Secondly, based on analyzing the utilization of SMEs financing method, the paper builds the SME financing efficiency evaluation index system from the aspects of business inputs and outputs. It gives an empirical analysis of the financing efficiency by constructing a DEA model with the sample of 44 SMEs of Qingdao in the year from 2007 to 2008. The results of DEA evaluation show that:overall, the financing efficiency of SMEs in Qingdao is generally low. Specifically, the listed firms have higher efficiency than non-listed companies; the financing efficiency of the companies with high asset margins is higher than those with low asset margins; the company that is efficient in using funds has higher financing efficiency than the inefficient ones.Thirdly, it analyzes the causes of different financing efficiency between different SMEs. Based on the SEMs financing impact factor analyzed earlier, the paper builds the evaluation model of impact factor, analyzes its effectiveness of and measures the influence of impact factor on SEMs financing. It also gives a detailed analysis of the impact process of each influencing factor from four aspects of the SMEs profitability, capital utilization, financing channels and financing structures. It finds out the reasons of SMEs low financing efficiency.Finally, the paper designs the optimization program to improve the SMEs financing efficiency from three aspects of improving internal governance structure, enriching the financing channels, and improving the mechanism of indirect financing. It aims at providing decision foundation to promote SMEs financing efficiency and development.This paper makes innovative discussion in the following areas:1. Construct evaluation index system of financing efficiency, and use Data Envelopment Analysis (DEA) to make empirical analysis for the SMEs financing efficiency.2. Use multiple linear regression model to analyze factors which affects SME financing, fix the influence of each impact factor on SMEs, and scoop the reasons of general inefficiency of SMEs financing efficiency.