Regional Developing Environment And The Growth Of Small And Medium-Sized Enterprises

As the emerge of the small and medium-sized enterprises, the economy of China has grown rapidly and sustainably since reform and opening up 30 years ago. Smes is playing an important role in booming economy, enlarging reemployment and promoting innovations and technologies. However, due to financial crisis, smes was badly impacted. Rebuilding the environment to accelerate development of smes becomes a primary task of government. In the existing researches, it is commonly admitted that better regional development contributes to better economic development. However, this recognition is not sufficiently explained and analyzed in the aspect of relationship between the regional development and the growth of smes. In this paper, it took the first step to establish the evaluation index system to evaluate the development environment and used financial data to assess the growth of smes. After that I chose mutiple regression, co-integration and mathematical analysis as the main method to explore the relationships between the development environment and growth of smes. Since Zhejiang province has a decent number of private enterprises I chose Zhejiang province as the example to conduct the empirical analysis, the result shows that the development environment promotes the growth of the smes significantly. Natural ecological environment, economic environment, social environment and the basic environment which are the constitution of the development environment have impacts on the growth of smes in different aspects. Natural ecological environment negatively affects smes growth while the others contribute positively. The economic exchange cost strengthens the effect which plays part of the intermediary role. Zhejiang province should take steps to strengthen the cultivation of talents and construct a pool to reserve them, improve the efficiency of policy and provide an excellent infrastructure which would promote development environment. As a result, economical exchange cost would be reduced to accelerate the growth of smes.