Empirical Study On The Correlations Of Financing Channels And R&D Activities And Achievement Of China’s Private Enterprises

As one of the most significant components of China’s characteristic socialist market economy, private economy has made great contribution to the economic development of China. Meanwhile, the capability of independent innovation and R&D has irreplaceable effect on the implement of the national strategy of innovational country construction. However, due to the historical reasons and self-causes of Chinese SMEs, the difficulty of financing has become the leading problem that constrains the further development of China’s private enterprises. Particularly, in the aspect of R&D. the shortage of funds has been one of the most severe obstacles to the self-reliance innovation of the private enterprises, the long-term prosperity of private economy, the reform of Chinese economic development model, as well as the Chinese economic and social comprehensive progress.Considering the recent emergence of informal finance, the debt finance in this thesis has been divided into formal finance and informal finance. In order to analyze the financing constraints on the R&D activities of private enterprises, the thesis conducts an empirical study on the correlations between the choice of financing channels and the R&D activities of private enterprises. Moreover, the thesis may also further explore on the direction and the emphasis of the future reform of China’s financial market, as well as how the financial market will serve the overall development of the real economy.With the survey data on the private enterprises in national wide, which was jointly collected by4formal institutions in2008. the thesis empirically tested the relations among the private enterprises’ financing channels, R&D activities and regional economic growth. The research finds out that it is relatively easier for the private enterprises to get R&D funds from formal finance than that from informal finance. The scale of the formal finance funds has a positive correlation with that of the R&D investment; the correlation between the scale of informal financial and that of the R&D investment, however, runs to the opposite. Formal finance can improve the R&D achievements, while informal finance does the opposite. It is widely proved that the R&D activities can advance enterprise’s performance, which will further enhance the regional economic growth. Nevertheless, if the private enterprises in a certain region rely more on informal finance as their major source of R&D funds, the stimulating effect of R&D on regional economic growth will be significantly weakened. This thesis also verified the varied degrees of dependence on informal finance will have great influence on the economic benefits of R&D.According to the data analyzed above, in perspectives of improving financing circumstances and independent R&D activities of the private enterprises as well as economic growth, this thesis has made constructive suggestions as follows:Private enterprises should adopt the technical innovation pattern which serves their demands and current development phase. Large state-owned commercial banks should be encouraged to release more R&D specific-purpose loans to private enterprises. More small and medium-sized private commercial banks should be established to perfect Chinese financial system. Accelerate the progress of interest rate marketization. The government should grant more aid to support the innovation of private enterprise and guide them to release financial information more clearly properly.