Study Of Several Problems In Small Business Development

As the state-owned enterprises are being reformed fatherly, small business plays a more and more important role in Chinese economy. It has becomes a hot issue which attracts more and more attention in the theoretical fields to study the small business problems. On the one hand, small business problems play a more and more important role in stimulating and stabilizing the social economy, relaxing the underemployment pressure, satisfying the characteristic demands and accelerating technological advance. On the other hand, small business is a pioneer in the step-by-step market reform. All the state-owned small business, private small business and township small business adopt themselves to the changing market environment by system innovation, technology innovation and market innovation. They explore a business development road, which satisfies the market demands. Though there is a great and rapid progress in small business during the past years, they still face a series of new problems and challenge after entering WTO and with economic structure regulation and more and more fierce market competition. Though small business is of flexibility, easy transfer to other industry, easy innovation and great vitality, they are inferior to the large business in information, technology, human resources and capital raising and face many hard-to-solve problems during their development. This paper uses the ideas and methods of modern enterprise theory, neo-classical economics, games theory, information economics and neo-system economics to analyze some typical problems which small business will face, such as moral risk, inspiration, capital raising and industry policy on small business, etc. the results show that it is natural for small business to appear and develop greatly. Because of the unbalanced development in small business, they will probably face such two problems during their development. Inside, it is difficult for small business, especially the state-owned small business, to solve the manger inspiration problems. Even if the annual salary is introduced, the inspiration methods chosen by small business are of great limitation because there is the manager moral risk. Outside, it is hard for small business to raise capital, especially to raise capital directly. Even ifindirect capital raising from Commercial Bank, the ration in credit and loan market will restrict the capital raising demand of small business because there is a reverse selection risk. Besides these, as a dynamic social organization, it is natural for small business to die and appear since social economic advance is a continuous selecting evolution. To intervene small business by industry policy may bring about negative influence on economic development. From this point of view, it is better to adopt other ideas and ways to guide small business development...