Study On The Relationship Between SMEs’ Development And Construction Of Small Towns

Small towns,basis for China’s urban system, will be major carriers for a large number of rural population in the process of urbanization.However,some small towns are becoming empty due to the lack of support from industry. Thus they can not attract rural population to leave their homes into the towns and can not give full play to their gathering function during certain space. Experience of developed countries shows that the industrial development of small towns mainly depends on SMEs, while SMEs’ development is inseparable from the construction of small towns. Therefore, the study on the relationship between SMEs’ development and construction of small towns in our country hs aroused the concern of academics, but the existing research has focused on describing the mutual relations between them qualitatively,rarely with quantitative inspection.After analyzing transmission mechanism of interaction between SMEs’ development and construction of small towns in theory.through grey relational analysis with data from2005to2011,this paper inspected interrelated degree between SMEs’ development and construction of small towns from the perspective of the Nationwide,the East,the Middle and the West.Furthermore,by superior analysis,this paper obtains main factors of SMEs’ development which deeply affect the construction of small towns,also the main indicator of construction of small towns for SMEs’development.Empirical results found that:SMEs’ development and the construction of small towns in our country are significantly related to each other,while the interrelated degree varies within different regions.The East had the highest interrelated degree,The Middle ranked the second and the West is the lowest.Considering the impact of SMEs’development on the construction of small towns,the empirical evidence indicated that the number of SMEs is the main indicator affecting the level of small towns’ construction,meanwhile the industrial structure of small towns and small towns’scale are important factors for SMEs’development.Based on the above research, the paper believes that the key to promote small towns’ construction in China is to actively cultivate and support the development of SMEs in small towns, the government should create a good environment for SMEs’ development from the perspective of financing,information flow and environmental protection etc..At the same time,the construction of small towns should be delivered under a reasonable plan in accordance with SMEs’ development.