Theory And Empirical Research On Financing Of The Private Technological SMEs

Private technological small and medium enterprises (SMEs) play an important role in promoting China's economic development, while financial constraints are the major obstacles to Chinese private technological SMEs'survival and growth. To remove private technological SMEs'financial obstacles and facilitate their development, it is important to know about the SME's financial structure and to study what affect private technological SMEs'financial structure and financial constraints. Both theoretical and empirical analyses are necessary to private technological SMEs'financial structure studies, while there have been few classical econometric studies on Chinese private technological SMEs'financial structure.Based on the review of capital structure theories and empirical researches, considering the background for Chinese private technological SMEs'finance, this paper analyzes the effect of private technological SMEs'own characters on their financial structure and financial constraints. In detail, the main issues in this paper are as follows:It reviews capital structure theories, analyzes private technological SMEs'characters and the applicability of capital structure theories to private technological SMEs'financial structure studies, and introduces financial growth cycle theories as well, which provides a theoretical basis to analyze empirically the determinants of Chinese private technological SMEs'financial structure. Next, this paper reviews empirical researches on the determinants of private technological SMEs'financial structure, so as to supply references to variable definition, econometric tool choice and the specification of econometric models on private technological SMEs'financial structure.Based on traditional capital structure theories and empirical studies on private technological SMEs'capital structure, this paper develops econometric models to show the determinants of private technological SMEs'financial structure. With the sample of manufacturing Private technological SMEs in Beijing which have gotten loans from banks, it analyzes how the industrial type and the ownership type influence private technological SMEs'financial structure, by ANOVA and Kruskal-Wallis one-way analysis of variance. Besides, it studies how effective tax rate, non-debt tax shields, size, asset structure, growth and profitability influence private technological SMEs'financial structure with panel and cross-sectional data respectively.It also discusses the determinants of private technological SMEs'financial structure, which face serious financial constraints. It analyzes private technological SMEs'characters, how these characters affect these enterprises'financial behaviors, and how asset structure, size, profitability, growth, age and industrial type influence the private technological SMEs'financial structure. As well, it compares the determinants of private technological SMEs'financial structure with those of manufacturing and listed private technological SMEs'financial structure, in order to find those factors which affect significantly Chinese private technological SMEs'financial structure.The conclusions of this study are as follows: (1) since private technological SMEs prefer internal financing commonly, based on the characteristic that internal fund is the most important financial source for private technological SMEs, this study suggests designing tax policies to encourage private technological SMEs'accumulating the internally retained earnings; (2) because direct finance through capital market relieves limitedly private technological SMEs'financial restraints, debt finance is the most important external finance channel for Chinese private technological SMEs'; (3) private technological SMEs (especially technology-based private technological SMEs) face financial constraints widely, especially at lack of long-term debt; (4) there is usually size-based discrimination in private technological SMEs'financing, while there is insignificant ownership-based discrimination; (5) providing collateral is necessary for private technological SMEs'acquiring long-term debts (including bank loans); providing collateral is not necessary for private technological SMEs'acquiring short-term business loans, but necessary for technology-based private technological SMEs'acquiring short-term business loans; on the other hand, debt finance agency cost caused by information asymmetry significantly influences private technological SMEs'finance, and private technological SMEs having more growth opportunities will face more serious financial constraint; thus this study suggests constituting systems of invisible asset evaluation and information disclosure for private technological SMEs, and building private credit investigation institutions; (6) age is significantly positively correlated to the access to short-term loans, so a long and steady relation between banks and private technological SMEs is favorable to private technological SMEs'acquiring loans from banks.There are several improvements and innovations in this study as follows:Firstly, since how industrial type and ownership type influence private technological SMEs'financial behaviors is not paid sufficient attention to in China, this study discusses this question by non-parametric tests and regressions.Secondly, private technological SMEs play an important role in one country's technology innovations, but these enterprises face the most serious financial constraints. Now, domestic researchers have not paid enough attention to private technological SMEs'financial structure. This study discusses empirically the characters of technology-based private technological SMEs'financial structure, analyzes what influence their financial structure, and finally tries to give some suggests on how to solve financial difficulties of private technological SMEs.Thirdly, the data in this study are fresh and specific. In addition, most of the data are first-hand. During the analysis, not only does this study refer to the World Business Environment Survey and many statistical yearbooks, but also collects several hundreds of private technological SMEs'financial statements and other basic information of GuiZhou province. And in order to make sure that the data are accurate and reasonable, this study makes some supplements and eliminations of data according to the balance principle of financial statements during data processing.