Font Size: a A A

Study On The Capital Structure Of Small And Medium-sized Enterprises Based On Enterprise Life Cycle

Posted on:2013-06-06Degree:MasterType:Thesis
Country:ChinaCandidate:J ShaoFull Text:PDF
GTID:2249330395982189Subject:Financial management
Abstract/Summary:PDF Full Text Request
Small and medium-sized enterprises (SMEs) are the main body of the market-oriented economy as well as the impetus of rapid development of national economy. It also creates many opportunities of employment for the society and is the foundation of the stability of society. However, due to its small size, lack of secured assets, the unsound financial system and the low credit rankings, the process of the development of SMEs is faced with the bottleneck of financial difficulties. Additionally, many SMEs choose the method of financing that is not appropriate for them, resulting in the unhealthiness of capital structure that do not satisfy the minimum cost capital, which will have long-term impact on the development of the entity.Therefore, this thesis studies on the dynamic relationship between the life cycle and capital structure of the SMEs by both methods of normative research and empirical research, using the statistics of553listed SMEs enterprise during2009and2011as samples. This research bases its theoretical reference on the life cycle theory and aims at exploring the influencing factors of the capital structure of SMEs, which can help SMEs choose the appropriate financing methods and provide reference for decision to reduce the cost of capital.This article consists of the following five parts:Part I:The beginning of the article describes the background, purpose and significance of this study. Then, it carries out the existing research results in this field. Finally, it introduces the article ideas, structural framework and research methods.Part II:It firstly defines the concepts of small and medium-sized enterprises, capital structure and life-cycle, and then introduces the theory of capital structure and financial growth cycle, to establish an empirical model for the later ideas.Part III:This section presents the hypotheses of research, and explains the source of sample, the selection and definition of variable, and then it divides the period of SMEs into growth, maturation and recession using the net cash flow-based classification.Part IV:This part is empirical analysis. It includes both descriptive statistics and multiple regression analysis. Firstly, it describes the variational trend of the asset-liability ratio of SMEs in the different life cycle stages. And it uses the Kruskal-Wallis test and LSD test to examine the financial structure of the enterprise, it presents significant differences in the different life cycle stage. Next, it sets out a regression analysis of the model established, and then expound its results.Part V:In conclusion, it summarizes the research results, and then suggested that the choice of SMEs’financing strategy should be combined with the feature of their life cycle. And the government should also perfect the policy of support and development system for SMEs according to their life cycle.There are two main contributions of this article.On the one hand, the existing study of the influencing factors of capital structure characteristics is mostly qualitative research, and based on the main board listed companies, but this paper discusses the theoretical analysis and empirical analysis system based on the data of listed SMEs. Our result will help them to make financing decision, and suggest that SMEs should be adjusting their mode of financing dynamically to their life cycle dynamically.On the other hand, most scholars divide the life cycle through the rate of industrial growth. However, the rate of sales growth of the listed SMEs is fluctuated, thus this method is not accurate enough. In this paper, the division of the life cycle is based on net cash flow; and this method will be more accurate and has certain stability.
Keywords/Search Tags:Small and Medium-sized Enterprises, Financial Growth CycleTheory, The Influencing Factors of Capital Structure, Financing Decisions
PDF Full Text Request
Related items