The Empirical Study On Sustainable Growth Of The Private Listed Companies In Jiangsu And Zhejiang Province

In recent years, with the development of private economy, the private listed companies of Jiangsu and Zhejiang province have become an important part of our security market. However, the companies haven't developed so well as we hope, it was a ubiquitous phenomenon that they grow too much or too little is. Therefore, sustainable growth management is a practical challenge for Chinese private companies, especially for those private listed companies in Jiangsu and Zhejiang, which grow over without proper growing-management so that leads to downfall or even bankruptcy.Every company has a proper growth rate when it develops year by year, extra-fast growth will affect business just like what the slow growth does. It is this classical theory that this paper starts with, focuses on Jiangsu and Zhejiang province, the most developed region in private economy, and based on a sample of 63 listed companies from 2003 to 2007, from which we have got 312 groups valid financial data for this study. First of all, the paper compares the sustainable growth rate (SGR) with the actual growth rate (g), respectively from population, industry and area respect. Secondly, the paper makes a non parametric hypothesis that the sample companies have grown with SGR, and then tests it by Wilcoxon method. At last, the paper takes LSGR (equals g - SGR) as the dependent variable, selects the SPSS software under the multi-line stepwise regression analysis method, to distinguish from the effective factors of sustainable growth for small and medium-sized private listed companies in Jiangsu and Zhejiang. We draw a conclusion from the study that for one thing, the private listed companies in Jiangsu and Zhejiang haven't grown by sustainable growth rate. For another, the number of companies which grow too fast has become less and less, but the growth rates are fluctuant among different years. In addition, the sustainable growth of the companies negatively affected by profit margin ratio, earnings per share and debt ratio, while positively effected by total asset growth rate and the coefficient of variation of sales revenue.Finally, the paper puts forward suggestions on how to achieve the goal of financial sustainable growth, respectively by extra-fast growth and slow growth companies, according to the sustainable growth theory and the outcome of the study.