The Impact Of Private Equity Investment On The Business Performance Of Small And Medium-sized Enterprises In China

Private equity investment is a product of a highly developed market economy and a new investment and financing model that meets the financing needs of small and medium-sized enterprises.As an inevitable product of economic and financial innovation,private equity investment can effectively fill the "vacuum" in the securities market and bank credit market.In the current financing environment and financial channels.SMEs have obvious disadvantages compared with large state-owned enterprises,such as small operating scale,weak bargaining power,and lack of social resources.Funds are the blood of an enterprise and the basic element to ensure continuous operation and accounting installments.The shortage of funds and high financing costs are the biggest practical problems for the development of small and medium-sized enterprises.Private equity investment is an important force in promoting the transformation of new and old kinetic energy,and has become an important carrier of China’s economic innovation and development.The formation of innovation initial capital is the core of innovation and development.Private equity investment started in the western world and developed rapidly in China’s capital market.Although China’s private equity investment has certain problems in financing channels,industry norms,and spatial distribution,it solves the"dilemma" of financing and development for various small and medium-sized enterprises that are in financial difficulties,technological innovation,and technological financing.Based on information asymmetry theory,capital movement theory,corporate governance theory,technological innovation theory,etc.,it analyzes the mechanism of private equity investment’s impact on business performance,and expounds the operation mechanism of private equity investment and the main problems of private equity investment in China.With the ultimate goal of seeking ways to improve business performance and promoting its healthy development,combined with empirical research results,some practical conclusions are drawn:compared with SMEs before equity participation or without private equity investment,the business performance of invested companies after entry Better;the larger the shareholding ratio,the more significant the improvement in business performance;private equity investment solves the pressure of SMEs’shortage of funds,and improves business performance through technological innovation;in terms of business performance improvement,compared to private equity investment institutions with private backgrounds,state-owned backgrounds The effect is more significant;private equity investment with a foreign background has a better effect on improving the business performance of the invested company;private equity investment affects the degree of earnings management by participating in the operation and management of small and medium-sized enterprises.According to the present situation of technology innovation and private equity investment,this paper puts forward some feasible policy suggestions,and looks forward to the future based on the present situation.