The Analysis Of The Financing Effect And Other Hidden Effect Of The Third New Board On SMEs

Based on the new expansion policy in the end of 2013, this paper uses most updated data and analyzes the market size of New Third Board and the general situation of SME in the New Third Board. This paper discusses the financing and non-financing function of the New Third Board and gives some predictions and suggestions for its development.Through analysis, we find out that the New Third Board can help SMEs to some extent, but there exists some limitations as well. For the enterprises which have transferred from the New Third Board to Stock Exchange, the financing role of the New Third Board is not significant.The New Third Board has financing effect on SMEs to some extent, which can help them enlarge the scale of production. But after the analysis, we find out that non-financing functions such as incentives and regulatory functions are the main role of the New Third Board and enterprises can get financing through these hidden non-financing effect.For policy response, we draw the following conclusion. First, we should further improve and promote the market-maker system, the trading volume and the liquidity of market. Secondly, we need to pursue the effort to encourage small and medium enterprises to take part in the market. Thirdly, the specific transfer mechanisms of the New Third Board should be improved. Fourthly, the delisting mechanism should be established to improve the Chinese capital market system. Last but not least, Chinese stock equity trading centers should be integrated and set unified and standardized management rules.