Exploration of the Influential Factors of the Financing Capacity of Small and Medium-sized Enterprises in Jiangsu Province of China.

Liu, Ce (2020) Exploration of the Influential Factors of the Financing Capacity of Small and Medium-sized Enterprises in Jiangsu Province of China. Masters thesis, Griffith College.

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Abstract

This positivistic study is to empirically explore the influential factors of the internal and external financing capacity of SMEs in Jiangsu Province of China. Through the comparison of related Western literatures and Chinese literatures, it could be detected that the related studies in China are mainly based on the Western studies and the systematic research to comprehensively explore into the influential factors of financing capacity of SMEs is limited, which make it necessary to have comprehensive analysis in China. As a result, this research is to empirically probe into the financial data of companies from Jiangsu Province of China listed on the SME board of China from 2016 to 2018 with the software of SPSS. Through descriptive statistical analysis, correlation analysis and regression analysis, the findings could be summed up as on three aspects. First of all, in the aspect of the influential factors of external financing capacity of SMEs in Jiangsu Province of China, the factor of enterprise scale is detected to be able to exercise significant and positive influence on the external financing capacity of SMEs in Jiangsu Province of China. Secondly, in the aspect of the influential factors of internal financing capacity of SMEs in Jiangsu Province of China, it is demonstrated that the factor of profitability could have significant and positive impact on the debt level, which is divided from the pecking order theory of financing. But the factors of internal accumulation level and risk control capacity are verified to be influential factors of internal financing capacity of the sample companies. Finally,In the macro level, it is first suggested that a unique financial service system for SMEs could be set up. Bank loans are the main external financing channel for SMEs. Also, other financial institutions funded by private capital could also be supported by the government to offer more financing channels for SMEs. In addition, innovative equity transaction markets could be developed to offer more equity financing opportunities for SMEs. Thus, the enterprise scale could be expanded and realize diversified and sustainable development.

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