Research On Financing Innovation Of Chinese SMEs

Along with the continuous deepening of economic reform, China's SMEs, to be an unprecedented development, is playing an increasingly important role in the national economy. However, over a long period, SMEs could not match its important role in the source problem of obtaining the funds needed for its development. It becomes a issue being shown much concern by the authorities, enterprises and scholars that how SMEs do financing innovations to alleviate the plight of financing . Financing innovations in SMEs involve mathmatics, finance, institutional economics, business management and other disciplines, so there are a variety of approaches multiply used in this paper, which can clarify related issues . The structure of this paper is as follows :Part I (Chapter 1): The background and significance of this paper are introduced. And the related literatures are reviewed, with the research ways and ideas, innovative points being concluded.Part II (Chapter 2): Starting from international perspective of SMEs' standards, the definition of SMEs in the major countries and regions of the world is put down. And Chinese SMEs' financing difficulties are systematically analysed. According to the theory of Division Evolution by Yang XiaoKai, the deep-seated reasons, which results in SMEs' financing problems, are underdeveloped divisions and fail coordination in the economic transition period.Part III (Chapter 3):Based on Finacing Theory, the problem of dual financing structure, which exists in Chinese listed companies(including state-owned companies and private companies), unlisted state-owned enterprises and unlisted SMEs, is analysed. Resolving this issue will help improve SMEs' financing efficiency. It is proved that financing model of relationship for SMEs has an excellent applicability by simplified two-stage finacing model of relationship. Mechanism foundation of relationship, which bases on long-term cooperation between banks and enterprises are stressed. The impact to SMEs' financing structure, by the new pecking order, is analysed with financing efficiency. According to the new pecking order theory and efficiency evaluations of various of financing methods, SMEs' financing strategies can be chose in order so as to determine the structure of financing for SMEs.Part IV (Chapter 4, 5&6): Compared with traditional stock and bond financing, credit guarantee system, private placement and asset securitization are all financing innovative way. Although there are still some obstacles for Chinese SMEs to adopt the three financing innovative ways to collect funds, such as the underdeveloped capital market, imperfect legal system and accounting treatment, if we can use the three methods rationally, Chinese SMEs' financing difficulty will be solved effectively. Three ways provided for SMEs to practice financial innovation are introduced in details in this part from the characteristics, applicabilities and support system in many aspects. It is pointed out that in learning from international experience, Chinese SMEs' financial conditions can be improved effectively and the SMEs can be promoted greatly through many types of financial and non-financial mechanisms and innovative financing methods.Part IV (Chapter 7): Conclusions and Prospects.