Research On The Financial Predicament Of Small Enterprises In China

Financial predicament and fund restriction are important obstacles to small enterprises growth. The paper concentrates on the financial predicament of small enterprises in China. Based on the analysis of the financial situation, the paper explained theoretically the fundamental reason of the financial predicament of small enterprises in China, and put forward the pertinent advice.Based on the basic method of the economics, especially on information economics, theory of the firm and finance economics, the paper studied the fundamental reason of the financial predicament of small enterprises. Having analyzed the asymmetric information that leading high transaction cost inevitably which will infect the fund availability of small enterprises, the paper explore the direct reasons of the issue considering the financial situation of small enterprises in China. Following the insight into the fundamental reason of the financial predicament of small enterprises, the analysis adopts the method of case study. One is to describe and compare some successful model experience or representative cases from foreign countries. The other is to introduce domestic significant good means. And the last chapter proposes some strategy or advice to resolve the issue of the financial predicament of small enterprises in China.The novelty in this paper and the main achievements: First, it analyzes and summarizes the predicament of small enterprises in China and gives a theoretical justification using information economics, theory of the firm, and other theories based on direct observations in practice. Second, based on the analysis of the relational financing, it proposes a series of strategies and advices from the viewpoints of developing financial market, financial industry, expanding irregular finance, service system for finance small enterprises, and so forth for the sake of reducing the cost of information.