A Study On Financing Difficulties Of SMEs Based On Behavioral Finance Theory

Small and medium enterprises (SMEs) have been played an important role in many countries economic development. But, it is difficult for SMEs to obtain adequate funds to survive and develop, which is the key problem for SMEs to develop. The problem that SMEs can not acquire adequate funds has attracted academic attention, but the traditional research is from the perspective of rational economic man and can not explain some phenomena. Therefore, this thesis attempts to study the problem with the theory of behavioral finance, and then try to find a new way to solve the problem of financing for SMEs.In this dissertation, we use standardization research and empirical research, qualitative analysis and quantitative analysis to study the problem from theory and practice.Firstly, the dissertation analyzes the current situation and the difficulties of SMEs financing. And the dissertation points out that SMEs in our country are mainly depending on banks loans to get external financing, and then they can get financing from equity market and venture funds. Other ways of financing are subject to many constraints. Furthermore, the dissertation uses grey system theory and expert scoring method to study the efficiency of SMEs financing and the efficiency is low. And then the dissertation analyzes the reasons why there are problems SMEs can not get financing in our country with behavioral finance theory.Secondly, with theoretical analysis and empirical test, the dissertation analyzes the negative impact of "herd behavior" in credit market on SME financing. After research, we find that there is obvious "herd behavior" in the credit market, and the large banks are the leading herd, whose loan behavior will make small and medium sized banks change their loan behavior. And we also find that capital constraint as new information, which is promulgated in 2004, causes small and medium sized banks follow the large banks to reduce the loans to SMEs.Thirdly, with theoretical analysis and empirical test, the dissertation analyzes the negative impact of "herd behavior" in stock market on SME financing. After research, we find that in the stock market, there is herd behavior between the main board and the SME board. And on the SME board, the herd behavior of stock prices fall is more obvious than that of stock prices rise, which results in the difficulties of SMEs financing.Fourthly, the dissertation discusses the relationship of venture funds and SME financing from the view of behavioral finance. As venture funds are affected by over-confidence, cognitive bias and herding behavior, they require SMEs to transfer part of SMEs'stock rights to obtain financing of venture fund, and the ratio of transferring stock rights rises as the degree of venture funds over-confidence rise, which may be rejected by SMEs, resulting in the failure of SMEs'financing. At the same time, due to the imperfect laws and regulations, narrow funding sources and inadequate exit mechanism in China, venture funds in our country do not play their desired effects in SMEs financing.On the problem of SME financing, we should further research the effect of private financing, bond financing, growth enterprise market (GEM) financing and government subsidies on SME financing.