Empirical Analysis on Financing Constraints of SMEs of China— Proofs from Pre-IPO three Years’ Panel Data of China’s Listed Companies Listed in 2015

Abstract

Because of defects of financial system of supporting Small and Middle Enterprises (SMEs) and the deficiencies of SMEs itself, China’s SMEs are facing more serious financing constraints than big enterprises. Using cash-cash flow sensitivity coefficient as proxy variable, we make use of pre-IPO (Initial Public Offerings) three years’ panel data of China’s firms listed in 2015, empirically analyze the financing constraints condition of SMEs of China. The study has the following findings: firstly, China’s listed firms are facing common financing constraints before IPO, among them, firms listed on the main board are facing lesser financing constraints before IPO, firms listed on the GEM (Growth Enterprise Market) are facing relatively serious financing constraints before IPO, firms listed on the small and medium-sized board are facing the most serious financing constraints before IPO; secondly, through group regression according to fixed assets scale, results show that large enterprises are facing the smallest financing constraints, small businesses are facing moderate financing constraints, the medium-sized enterprises are facing the largest financing constraints.