Research On The Business Risk Of Private Enterprises In Hunan Province

Since the reformation and opening market to outside in 1978,The private enterprises(the following will call PE) of Hunan Province have experienced a great change in terms of from small to big and from weak to strong. The development of PE has become a significant power to facilitate the increase of economy of Hunan Province. However, in the process of PE development, most of PE have not yet established the modern corporate management system, still operated with family-management mode; Small and medium-sized PE have the problems of narrow financing channels, high financing costs, and supply of funds not timely; PE of a large scale always diversify blindly; the phenomena of imperfect corporate governance structure and"dominated by one stock"are serious, constrained the long-term development of PE, impeded the further strengthening of PE. Therefore this paper analyses the main factors of PE's business risk, and raises measures to prevent every risk factors targeted in order to improve the financing environment, the legal environment, governance of PE in Hunan Province, heighten the overall competitiveness and the ability against risks of PE through this way. So, the research of this paper has very important practical significance.At first, the paper analyzes the status of the development of Hunan PE, describes the features and insufficiencies of the development of PE. The risks always come from the status, for example, financing risk implicates in the status of rapid growth of private investment but single financing channels, and then on the basis of the analysis of the status, the paper raises that the PE of Hunan business risk include family business risk, financing risk, diversification management risk and moral risk, and discusses the reasons and the hazards of every business risk, and establishes the evaluating index system of business risk, empirical research is made by analyzing the business risk of 13 Hunan private listed companies in 2005, come to realize that there are 7 firms are in risk state level of from medium to tremendous for family business risk, diversification management risk or moral risk. Finally, the paper based on the reasons of every kind of business risk, raises the specific measures to preventing operational risk of PE in Hunan Province.