Abstract
To analyze the financing problems of private enterprises in China, this paper uses the financial data of A-share listed enterprises to construct four sets of Euler investment equation models. The empirical analysis of the models indicates that Chinese enterprises are generally facing financing constraints. However, compared with the state-owned enterprises, the financing constraints of private enterprises are more serious and common. To solve the financing dilemma of private enterprises, we need to deepen the structural reform of the financial supply-side, promote the transformation and upgrading of private enterprises, improve financial infrastructure and create a favorable financing environment.
Highlights
In the past 40 years of reform and opening-up, the nonstate sector of China has been growing steadily
The financing constraints faced by private strategic emerging industries are more serious, and the allocation of financial resources to strategic emerging industries is insufficient. 3.3 Analysis of empirical results The empirical analysis of the model shows that Chinese enterprises generally face financing constraints, but compared with state-owned enterprises, the financing constraints of private enterprises are greater
To solve the financing dilemma of private strategic emerging enterprises and stimulate the vitality of private enterprises, we need to improve the construction of financial infrastructure, create a better financial ecology, achieve a high degree of agreement between financing supply and private enterprise capital demand, and make private enterprises secure development
Summary
In the past 40 years of reform and opening-up, the nonstate sector of China has been growing steadily. Compared with state-owned enterprises, private enterprises in China are small in scale, short in development time, and face serious institutional constraints in many fields. The report "MSME Finance Gap: Assessment of Shortfalls and Opportunities in Financing Micro, Small and Medium Enterprises in Emerging Markets" issued by the World Bank in 2018 shows that the potential financing demand of small and medium-sized enterprises in China amounts to $4.4 trillion, while the financing supply is only $ 2.5 trillion. Miller[1], in the perfect capital market without friction, the internal and external financing of enterprises can be completely substituted. If it is difficult for the enterprise to raise enough funds at a lower cost, they can only be forced to give up some valuable investment opportunities. Enterprises in China, especially small and medium-sized private enterprises are facing financing constraints
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call