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The Study Of Offshore Financing For Small And Medium Enterprises

Posted on:2011-11-09Degree:DoctorType:Dissertation
Country:ChinaCandidate:Q ZhangFull Text:PDF
GTID:1119360308483042Subject:Public Finance
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In recent years, our country's small and medium-sized enterprises (SMEs) have also growing quickly and becoming important components of our national economy step by step. They bring an important effect on promoting economic development, creating more jobs, stimulating the market and so on. But because of relatively small scale, relatively low technology content and other objective restricting, our country's SMEs is also confronted with a lot of problem in the real development process. The difficulty of financing, which highly restricted the development and expanding of our country's SMEs, has been the most outstanding problem.According the global economy integration and finance globalization, the opening policy going a step further and the liberalization tendency becoming more apparent, it's bringing gigantic developmental opportunity for our country's SMEs. The region and field's restriction of foreign bank's business will dismiss step by step. The international venture capital is entering. These could greatly broaden financing channel of our country's SMEs. More and more our country's SMEs choose to gather its development fund through the oversea capital market, and also gain the close attention of the overseas investors. After joined WTO, for domestic A-share market remains in the doldrums, especially for the issuance of new shares which is suspended because of the share-trading reform in 2005, overseas listing became the optimal choice for many domestic enterprises. Although after 2005, our enterprises take on a trend of overseas return on the issue of overseas listing, in 2008, a second time of large fluctuation in the A-share market had drived domestic enterprises, especially for those SMEs, to prefer selecting overseas market to be the listing location to a certain extent. However, there are still lots of problems under this new period and new form which are worthy for us to take a discussion thoroughly. The whole article can be divided into eight chapters, and its main content and .basic viewpoints are as follows:Chapter one is the introduction. This chapter is mainly divided into two parts. First, it makes a clear definition of the concept of our country's SMEs, making sure those SMEs referred in this article are economic units which are all independent, autonomous, smaller scale and have no ability to dominate on the market. From the four perspectives, allocation of resources, demand, technological progress and system innovation, it points out the importance of SMEs in China's national economy, especially the role in ease the employment pressure. And it also points out the indispensable statue of SMEs in our national economy. From the perspective of financing channels and the financing constraints analysis faced by various financing channels of SMEs, I come out a way that SMEs should take that overseas listing of its mode of financing in order to narrow the funding gap and meet the financing needs of rapid development. Second, in the last two paragraphs of this chapter, I further descript the purpose, significance and method of the research. According to the report of 17th National Congress, it has clearly put forward that "promote equitable market access, improve the financing environment and remove institutional barriers in order to promote development of individually-owned businesses and private companies as well as small and medium-sized enterprises." One of the key problems for SMEs' development is the difficulty in financing. And to solve this problem, in addition to the need to further improve China's multi-level capital market system, but also need to focus on overseas, open up and improve a variety of financing channels. This article attempts to make a research on the forces of SMEs' overseas listing and the choice of model in order to raise a viable solution to solve the financing problem of SMEs, at meantime, it also can raise the corresponding policy recommendations for those relevant functional departments on the legal supervision of the SMEs' listed overseas.Chapter two is the relevant literature review of SMEs'overseas listing. As the basis of this article's research, this chapter is about the features of types and financing decision-making process of passed SMEs, financing structure theory, the research on main pattern and choice of SMEs'overseas listing. This article gives different descriptions according to different financing demands of various types of SMEs, such as type of high-tech, manufacturing-based, service-oriented and community-based, etc. Following the principle that total receipts of the financing should be greater than the total cost of financing, those factors such as industry, financing cost, risk factor, flexible financing structure, corporate control and so on are considered, and then through the identification of funding requirements to select the best financing opportunities in order to ensure the accuracy of corporate finance decision-making. In the enterprises'capital structure theory, this article explains theory of the net income, MM, interest, Pecking Order Hypothesis and unusual Pecking Order Hypothesis separately. With the continuous relaxation of the theoretical assumption, its conclusions are closer to reality. The modern financing theory regards that the sequence of corporate finance is the internal financing prior to the external financing, while debt financing prior to equity financing. This article analyzes the patterns of our SMEs'overseas listing, including pattern of IPO listing, buying shell listing, making shell listing,convertible bonds and depository receipts listing and private placement, etc. For the motivation of enterprises listed, I usually think there are two kinds; financing and business. As for those factors which can influence the choice of enterprises listing, the macroeconomic factors are mainly made up of geographical, cultural and legal while the microeconomic factors mainly including the gathering degree of the same type enterprises in exchanges, exchange-traded technology related to the company's interests and so on. Nowadays, the domestic research focuses on the choice of enterprises listing place and generally consents that Hong Kong and Singapore are suitable markets for Chinese enterprises overseas listing.Chapter three is the analysis of the status of Chinese SMEs financing. First, this chapter gives an overview about the development statues, regional distribution and industry characteristic of our SMEs overseas listing. The trend is obvious, from the circumstance that set Hong Kong as the main capital market to a global proliferation of other overseas capital markets gradually. Those SMEs chose to make overseas listing are mainly in our economically developed coastal areas, which show a phenomenon that traditional industry enterprises, service enterprises and high-tech enterprises are in parallel. The locations of its overseas listing are mainly concentrated in Hong Kong, Singapore and the United States. Based on a comprehensive understanding of our country's SMEs overseas listing, this article makes a further discuss on the finance methods and channels of SMEs from internal financing, debt financing and equity financing. Moreover, an analysis is made on the fundamental finance characteristics, main finance channel and method of Chinese SMEs. At the end of this chapter, this article makes an analysis on the financing environment of SMEs according to the environments of financing state, law policy and financial market. On this basis, I make a further analysis on the financing statues of SMEs from macroeconomic and microeconomic sectors. And then I come out a conclusion that for the restriction of traditional financing channel, our country's SMEs cannot meet the needs of its financing. In the long run, we should further improve the financing channels. However, it's a long distance for those SMEs. So in order to meet the needs of SMEs financing as soon as possible, choosing overseas listing method is the most practical way to solve the financing problem of SMEs at this stage.Chapter four is about motivation and feasibility of the SMEs overseas listing. This part is divided into two parts. The first part is mainly about the motivation. First, through comparison, I analyze the listing condition, advantages and disadvantages at home and broad major stock markets, so that make clear the restriction of the objective environmental conditions in financing decision-making of SMEs and explain the objective reasons for overseas listing. Then I analyze the motivation from the overseas listing decision-making side. In addition to the statements of financing costs, affordability, effectiveness of business, bind hypothesis and escape hypothesis, this article consent that the overseas listing is an inevitable result of the incompatible between the maximize profit nature and capital market development. Furthermore, it points out that the practical motivation for overseas listing is caused by the long domestic listed cycle, financing difficulties and defects of domestic capital market. In the second part of this chapter, I make a further economic analysis on the feasibility of SMEs overseas listing from the supply and the demand side.Chapter five is about the pattern choice of SMEs overseas listing. First, based on the literature review mentioned in chapter one and combined with the actual situation of SMEs overseas listing, I make a targeted statement to those three traditional overseas listing patterns:IPO, buying shell and borrowing shell pattern, in order to analyze advantages and disadvantages of SMEs overseas listing and financing according to different pattern choice. Especially analyze the advantages, risks specific operational procedures and the choice of shell resources of the borrowing shell pattern which our country's SMEs use most. At mean time, I also make a statement on those creative patterns such as APO,SPAC and DPO, etc. Among these, SPAC is benefit for resolving the "financing bottleneck" of High-tech SMEs and promoting them to develop rapidly. On this basis, this article analyzes appropriate overseas listing pattern s according to different financing demands of SMEs of different types at different stages. As far as the enterprise type is concerned, manufacturing SMEs should focus on the choice of the pattern with strong financing capability and stability; service SMEs should focus on the choice of the pattern with short cycle, strong refinancing capability and fewer refinancing restrictions; High-tech SMEs should focus on the choice of the pattern with high-growth characteristics and unique business concept; and community SMEs should focus on the choice of the pattern with government and community funding rather than overseas listing. As far as the development stage is concerned, start-up stage should choose the pattern with low demands, simple financing procedures and rapid financing speed; Operational stage should focus on the demand for funds and capability of refinancing; growth stage should think more about the capability and continued stability of financing; while gradually mature stage should take more consideration about the possibility of increase on its listed on the main board.Chapter six mainly focuses on the factors which can affect the selection of overseas listing of site for Chiese SMEs and how they make their choice. This selection should not only take those factors such as trading rules which is made up of exchanges, listing standards, information disclosure requirements, listing costs and so on into consideration, but also think about the different influence brought by macro environment where exchanges reside in. Then, I make a comparative analysis among those optional locations for China's SMEs overseas listing and take Toronto Stock Exchange listing as an example to introduce the specific operation of Chinese SMEs overseas listing.Chapter seven is the utility analysis of SMEs overseas listing. This chapter is also divided into two parts. In the first part, it analyzes the effectiveness and substitution effects of financing by Financal Utility Effection. It points out that SMEs have strong demand for funds in order to realize their maximum utilities and meet the requirements of enterprises development. However, the differences between home and broad financing utility result to certain selectivity for China's SMEs while making overseas listing financing strategy. Current financing boom of our country's SMEs is affected by some certain objective environmental factors. Because there is a certain alternative relations between SMEs overseas listing financing and domestic financing, as the domestic financing environment and international finance degree improved, the listing and financing of SMEs in China will eventually achieve a rational decision-making return. The second part of this chapter analyzes the corporate governance role of SMEs in China through threshold effect, binding effect and external governance mechanisms and other mechanisms. It also analyzes the promotion mechanism which the overseas securities markets put on the corporate governance by restraint mechanism, supervision mechanism, financing mechanisms and other securities market mechanism. Moreover, the second part analyzes the effect of corporate governance and corporate performance on the point of company's operating performance as well as the value of the company, and it affirms the positive effect of Chinese SMEs overseas listing in the area of corporate governance.Chapter eight is to raise rela ted suggestions to solve problems of SMEs overseas listing. First for the micro-risks, through the analysis of management risk, cost of risk, the intermediary's choice of risk, information disclosure of listed programme risk, legal risk, restructuring and reorganization risk, this chapter suggests that, before the choice of overseas listing, SMEs should consider the substance of their own needs seriously, improve corporate governance, select outstanding intermediary bodies and select the locations of overseas listing carefully. In this way, it can reduce the micro-risks in the process of overseas listing and improve the success rate of overseas listing. Second, according to the comparative analysis of domestic and overseas securities regulatory mechanism, this chapter makes relevant recommendations to perfect the regulatory mechanism of China's SMEs overseas listing from legal problem and cross-border supervision. At meantime, based on the analysis of the regional and global securities regulatory cooperation mechanism, this chapter discusses the international co-operation on cross-board supervision. Moreover, this chapter also makes specific proposals to provide with macro-policy support system which can promote SMEs overseas development and strengthen SMEs management strategy.
Keywords/Search Tags:Overseas Listing, Pecking Order Hypothesis, Financal Utility, Effection, Micro-risks, Cross-border Supervision
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