Theoretical Analysis And Empirical Study Of The Relationship Between Financing Of Smes In China

Because of enterprises' scale and the quality of ownership, small andmedium-sized enterprises seldom get loans from financial markets, while, thethreshold of entering stock market or getting the quality of raising bonds are very high,SMEs can only choose internal financing or illegal-private financing, on one hand,they face the shortage of cash;on the other hand, private financing enlarge the wholerisk of financial market. This paper analyzes the feasibility of relational financingfrom institutional economics theory, contract economics theory and financial mediatheory. Moreover, it concludes the exiting condition of SMEs relational financingsystem comparing to American small and medium-sized financial institution, mainbanks in Japan and house banks in Germany. Nowadays, relational financing systemis one of the most important methods to solve the cash shortage in SMEs. At the endof this article, the fifty listed SMEs (the sum of short-term and long-term debts,assuring condition and the interest of debts) are used to do the demonstration usingthe SPSS software, and get the conclusion that relational financing is appropriate toSmall and medium-sized enterprises in modern China.