Empirical Study on Financing Constraints of Small and Micro Enterprises in Taizhou

Abstract

The development of regional and private economies has been hindered by the persistent challenges faced by small and micro companies in securing financing. This study develops an empirical framework to examine financing limitations and conducts a comparative analysis on the financing constraints faced by small and micro firms in Taizhou. The analysis is based on a dataset specifically collected for small and medium-sized enterprise financing. Research indicates that capital structure factors have an impact on the investments of both medium-sized enterprises and micro, small, and medium enterprises (MSMEs). However, MSMEs tend to face more severe limitations in accessing financing compared to medium-sized enterprises. Additionally, the presence of assets that can be used as collateral is found to significantly influence the level of indebtedness for MSMEs, whereas its effect on medium-sized enterprises is less pronounced. The article presents a range of countermeasure proposals aimed at addressing the financing challenges faced by MSMEs. These proposals encompass several key areas, including the establishment of a policy support system that promotes collaboration across multiple sectors, the provision of differentiated credit support, the restructuring of the financing credit guarantee system, and the advancement of digital inclusive finance to enhance the precision of financial services for MSMEs.