Research On The Financing Problem Of SMEs In China

SMEs play an increasingly important role in China’s national economy, such as prospering the economy, increasing employment and promoting technological innovation. However, due to SMEs’own characteristics, immature financing system and other reasons, the financing problem of SMEs has become a bottleneck encountered. And in the shading of financial crisis, the problem of financing SMEs has become increasingly prominent and cause great concern in the community, advocateing the innovation of financing channels for SMEs. In this paper, on the basis of the relevant literature, we foucs on market and non-market factors as the perspective of analysis. In terms of market factors, we compare the differences of financing SMEs in developed countries, nake detailed analysis of China’s financial system in the background of the continuous market transformation and elaborate the market for SMEs which provide financing and make comparative analysis with the developed countries. Further, using data of financial statements of small plates listed companies and envelopment analysis (DEA) method, we do comparative analysis of pre-and post-IPO SMEs performance ranking in the industry and study how equity and debt financing affect SMEs’operating performance. In the non-market factors, we are trying to answer the question whether political connections make companies be able to obtain bank financing? And whether political connection significantly affects the company’s business performance? When a company changed its genral manager without political connection to one with political connection, how corporate financing and operating performance reacted. In the context of China’s market transformation, market and non-market factors are intertwined together and both play a key role. Markets provide financing channels for SMEs and non-market factors are affecting the ability of SMEs to access the market. These studies are designed to provide insights on solving the financing problems of SMEs, broadening the financing channels and establishing national multi-level capital market.