Research On The Financing Of Small And Medium Sized Enterprises In Haimen

Corporate financing has always been one of the core research fields of financial management. The financial structure of an enterprise has a profound impact on its daily operation and sustainable development. Back in the 1950s, traditional corporate financing theory and modern corporate financing theory began to develop sequentially. In the 1970s, the introduction of asymmetric information theory opened a new field for the studies of corporate financing. Compared with large sized enterprises, small and medium sized enterprises (SMEs) suffer from more information asymmetry and operational risk, which differentiates the two in terms of the financial structure and financing channels. With the increasingly positive effect of SMEs on China's social-economic development, SMEs financing has become a hot issue in the contemporary research field with theoretical and practical significance.SMEs in China have long suffered from serious financial restriction due to internal and external factors. On one hand, SMEs have their own weaknesses such as limited assets, lack of collateral, high operational risk, unsound financial management, and unfamiliarity with channels of financing, which undermine their financing abilities. On the other, Chinese financial markets and institutions are underdeveloped as a result of decade-long financial repression. This has caused limited channels of financing on the part of SMEs. Furthermore, slow development of the credit rating system, laws and regulations has also been a hindrance to SMEs financing. Only when these problems are solved can SMEs develop healthily and contribute to the steady progress of our national economy.The thesis focuses on the financing situations of SMEs of Haimen, Jiangsu Province. Through in-depth investigation and analysis, it tries to offer an insight into the issue as well as provide some valuable suggestions to the SME financing. Therefore, the thesis is meaningful both in theory and in practice. With a clear research focus, the paper starts out by reviewing the previous financing theories of SMEs, and then introduces the past and present conditions of SMEs financing in China. In the third chapter, it conducts in-depth analysis of the financing situations of 91 sample industrial enterprises of Haimen based on the data and facts collected during a five-month field survey. The last chapter concludes with some suggestions aimed at boosting the financing abilities of these SMEs and improving the overall financing environment of Haimen.The research adopts the basic theories and methodologies of corporate finance, money and banking, information economics, and statistics. The data are gathered largely through questionnaires and face-to-face interviews. Under the guidance of general financing theories of SMEs, the paper studies the financing of the sample enterprises both qualitatively and quantitatively. Statistical methodologies are applied in the quantitative analysis as well as in charts drawing which brings about a clear and vivid presentation of the research results.Apart from the introduction, the thesis includes four chapters. The first chapter reviews former domestic and foreign research into the SMEs financing. Chapter two introduces the history and status quo of the SMEs financing in China. The third chapter carries out qualitative and quantitative research into the financing channels, structure and environment of 91 sample enterprises of Haimen, Jiangsu Province. The last chapter provides some advice in the hope of remedying the problems indentified in the previous chapter.