Research On The Impact Of Private Equity Investment Performance For SMEs

As a financial innovation products Private equity investment plays an important role inthe global market economy. In the21st century, the rapid development of private equityinvestments become the second choice of many corporate finance. In recent years Chineseprivate equity market is growing rapidly, has been widespread concerned by society,become Asia’s most active plate. Private equity investment plays an important role inbroadening the financing channels for enterprises, promoting the rapid development ofenterprises and fostering multi-level capital market.At present, domestic small and medium-sized enterprise have difficulties in financingtranslation process. Banks often favor large and better credit enterprises. Capital shortagerestricts the development of small and medium enterprises. The rise of private equityinvestments to open up a new door for SMEs. From the point of view of foreign practicetests, private equity investment can bring innovation to the enterprise governance structure,better address the principal-agent relationship and improve business performance. However,whether the domestic private equity investment has improved the business performance ofSMEs it? In this paper, we will study the relationship between small and mediumenterprises performance according to the actual situation of private equity investments.Firstly, it gives a systematic overview of the investment entity and the investmentprocess and characteristics; introduces the development process of private equity in China,and analyzes status of private equity investments. Domestic private equity investmentinstitutions affect the performance of the SME Performance analysis followed. Finally thefirst empirical study comparing financial indicators have PE/VC-backed companies with noPE/VC-backed companies and analyzed further using multiple linear regression equationand quadratic effect of how the proportion of private equity holdings affect the operatingperformance of SMEs in the analysis. The results show that private equity can improvetheir performance within a certain range, but with the gradual increase in the proportion ofprivate equity investment and exceeds a critical value, the increase in the proportion ofprivate equity will curb enhance business performance. Finally, concerning the constructivecomments.