An Empirical Study Of The Financing Order And Influential Factors Of Internal Financing And Debt Financing

As the main force of the economic development, the small and medium-sized enterprises (SMEs) are playing important roles in the economic growing, solving the employment problem and so on. But the financing difficulties have been hindering the development of SMEs. In order to solve the difficulties in financing, the study of financing order and influence factors has very important significance.Based on the pecking order theory and combined the characteristics of SMEs, this paper points out that the SMEs subjectively prefer internal financing than debts financing, the SMEs'financing behavior is correspond to the pecking order theory. This paper innovatively uses the granger causality model to test the order of the internal financing and debt financing of the platelet listed SMES in 2006-2009.The result shows that internal financing is the granger cause of debts financing. That is, when the SMEs conduct financing decisions, they more subjectively prefer internal financing, and then debts financing.At the same time, this paper also examines the influence factors of the structure of the internal financing and debt financing, the result indicates that the enterprise size has no significant relationship to the debt financing ratio. The enterprise profitability, growth, asset collateral value, non debt tax shield significantly influence the debt financing degree.At the end, based on the result of the empirical study, this paper gives some politic advises from the aspect of the SMEs themselves and building politic financial support system.