Small And Medium-sized Enterprise Voluntary Disclosure’s Impact On Equity Financing Cost Research

Small and medium-sized enterprise (SMES)’s financing problem has always been an important factors which restrict the development of small and medium-sized enterprise. Until2004, the small and medium-sized enterprise board was set up in Shenzhen Stock Exchange, which means the SMES equity financing took a big and remarkable step. This paper’s writing purpose is researching at the relationship of medium and small-sized enterprises’ voluntary disclosure level and equity financing costs, and then give some effective suggestions on small and medium-sized enterprises’ equity financing cost levels improvement.Firstly, this paper establishs a voluntary disclosure index to measure the voluntary disclosure level. Then, choose beta coefficient, asset-liability ratio, total current market prise scale as the control variables, and choose the enterprise equity financing costs as the dependent variable to do the regression analysis. Choose200listed companies on small and medium-sized enterprise board in the2008as the research samples for empirical research, trying to find out the relationship between voluntary disclosure and equity financing cost.Through empirical test, we find that the listing companys’ level of voluntary disclosure and the equity financing cost have a significantly negative correlation coefficient in Chinese small and medium-sized board. The regression analysis also find that the sign of the correlation coefficient between beta coefficient and equity financing cost, and the sign of the correlation coefficient between asset-liability ratio and the equity financing cost, and the sign of the correlation coefficient between total current market pries scale and the equity financing cost of listed company in small and medium-sized enterprises board is consistent with the theoretical analysis, in addition, all these correlation coefficients are remarkable; when we analyze the relationship between each category message index of voluntary disclosure and equity financing costs, we find out that more disclosure of management discussion and financial anticipation disclosure can effectly reduce the equity financing cost. Finally, based on the theoretical analysis and empirical analysis results, we put forward some policy suggestions about voluntary disclosure of listed companies in small and medium-sized enterprises board.Innovations of this article:first, in view of the highly concerned financing difficulties of small and medium-sized enterprises, this paper avoid researching the debt financing problems of small and medium-sized enterprises which has been repeatedly researched, but study on SME equity financing cost. This paper choose data from small and medium-sized enterprise board which was set up in February2004, in Shenzhen stock exchange. Second, in this paper, voluntary disclosure is chosen as the breakthrough point of improving SME financing problems, and puts forward the point that voluntary information should be classified. The disclosure should be characteristic for every enterprise, so enterprises can balance the disclosure cost and gains, and finally, get the equity financing cost reduction goal.