Debt Finance And Corporate Performance: An Empirical Analysis Of Small- And Medium-sized Enterprises In Shanxi Province

Motivating the development of small- and medium-sized enterprises is the important foundation of maintaining steady, fast and sound development of national economy and great strategic task which influences people's living and society's stability. There are more than 0.6 million small- and medium-sized enterprises, which are mostly in the industries of coal, metallurgy, chemistry, machinery and building materials. Currently, the developments of small- and medium-sized enterprises are facing with many challenges and obstacles. The most important problem is the difficulty in financing. So it is meaningful to optimize the debt finance and improve the corporate performance of small- and medium-sized enterprises in Shanxi Province for researching and solving the problem of Shanxi'small- and medium-sized enterprises'finance theoretically and realistically.The paper firstly analyzes the current situation of small- and medium-sized enterprises'debt finance in Shanxi Province, exploring and concluding characteristics of small- and medium-sized enterprises'debt finance in Shanxi Province and disadvantages of their structures. In the empirical study part, the papers select the financial statements of 99 enterprises in 2007 and 2008 as the sample data and go through with regression analysis. It is concluded that there are remarkable negative relevant relations between debt finance and corporate performance, meaning the debt finance's soft constraint to small- and medium-sized enterprises in our province.In the end, the paper figures out that there are two aspects to improve the debt finance of small- and medium-sized enterprises in our province. In the aspect of improving corporate internal governance structure, we should strengthen construction of credit system of small- and medium-sized enterprises in Shanxi Province. We should standardize the corporate financial system in Shanxi Province. And we should develop massive small- and medium-sized enterprises with effort to improve the core competition of small- and medium-sized enterprises and actively promote professional management model. In the aspect of optimizing exterior structure management, we should deepen reforms of commercial banks and improve position and role of banks'supervising corporate debt. We also should carry out trial conduction of Bond Market of small- and medium-sized enterprises in our province and improve such system of debt service as bankrupt mechanism.