Research On Financial Efficiency Of Shanxi SMEs Based On DEA Model

As the result of increasingly national support on the economy of central region in recent years,the provinces in central region are rising rapidly. As one of the provinces in central region, Shanxicomes to be more and more prosperous as well, when the SMEs (Small and Medium Enterprises) ofShanxi start to play important roles in stimulating economic growth, improving employment rateand prompting economic restructuring for their considerable amount and various businesses types.However, due to the restriction of the small enterprise scale, unsound and non-standardadministration system and the lack of investment, the speed of development of SMEs in Shanxi arestill unacceptable. For modern enterprises, investment/financing is the fundamental element ofsurvival, and also the key weapon that gains them victory in the fierce competition with others.Through the empirical analysis on financial statements of sample SMEs, this paper concludesthat the financing efficiency of Shanxi SMEs is relatively lower than the ones in other provinces. Inthe last part of this article, author proposes some recommendations in the purpose of improving thefinancing efficiency of Shanxi SMEs.Firstly, this paper describes the current status of research on financing efficiency, and definesthe concept of financing efficiency and financing pattern. And to provide a solid theoretical basisfor the empirical research, Western Capital Structure Theory is introduced then. Secondly, factorsthat influence the financing efficiency are analyzed based on financing status of Shanxi SMEs.Then, the article emphasizes on the empirical research of financing efficiency of SMEs in the6provinces of central region. Based on DEA mode-in which the total assets, gross liabilities, andmain business costs are used as input arguments; total assets turnover, rate of return on net assetsand earning of per share as the output arguments;30listed SMEs in6central provinces are chosenas samples-the2010-2012financing efficiency are calculated. The calculating results imply that thefinancing efficiency of SMEs in Shanxi unacceptable and far below the ones in other provinces. Inthe last part of article, based on the author proposes recommendations for improving the financingefficiency from internal and external aspects. For SMEs, internal factors are the key elements tosolve the financing difficulties. Only by strengthen the level of management could the SMEs obtainthe trust of investors. Government should be the intermediaries of the capital market and the SMEs,and the financial and capital markets still should be refined and improved in order to guarantee thehealthy development of SMEs.