Research On The Impact Of Financing Mode On The Viability Of SMEs

Small and medium-sized enterprises(SMEs)play an irreplaceable role in promoting economic growth,employment and technological progress.In recent years,with the rapid advancement of technology,the market environment has become increasingly complex and changeable,and the competition among enterprises has become increasingly fierce.Small and medium-sized enterprises in China are facing a crisis of declining profits and widening losses.How to improve the survivability of small and medium-sized enterprises has always been one of the hot issues concerned by the economic theory circle.This paper makes a detailed review of relevant literature on enterprise viability and its influencing factors,SEMs financing mode selection and its impact on enterprises,and makes an in-depth analysis of the influence mechanism of SEMs ’ internal financing,debt financing and equity financing on enterprise viability,then puts forward three theoretical hypotheses.Then,this paper uses the data of 653 sample companies for 6 consecutive years,and builds a comprehensive index of corporate viability with the aid of the AHP-Entropy method to comprehensively measure the viability of the enterprise.The dynamic panel model and the second-order system GMM estimation method are used to reduce the endogenous problem of the model.Through empirical analysis,the theoretical hypothesis proposed in this article is tested.The test results basically confirmed the theoretical hypothesis proposed in this article.(1)Hypothesis H1: Endogenous financing has a greater positive effect on the viability of SMEs;(2)Hypothesis 2H: Debt financing has a certain positive effect on the viability of SMEs;(3)Hypothesis H3: Equity financing may have a negative inhibitory effect on the viability of SMEs.Finally,according to the empirical results,based on the perspective of viability,this article puts forward the following policy recommendations for the selection of corporate financing models: Firstly,when SMEs are faced with the choice of equity financing and debt financing,it is recommended to give priority to debt financing;Secondly,vigorously optimize my country’s SMEs The external financing environment,especially the debt financing environment.Although endogenous financing has a greater positive effect on the viability of SMEs,excessive reliance on endogenous financing is not conducive to the growth of SMEs.And debt financing is not only conducive to the expansion of SMEs,but also conducive to the strengthening of SMEs,that is,the improvement of their viability.