Influence of private equity on small and medium-sized enterprises corporate governance

Abstract

With the development of the international capital markets, private equity as a kind of new products has played an important role in corporate governance. However, financing difficulties, our domestic small and medium-sized enterprises encounter, will restrict the development of the enterprises. They must broaden the financing channels. Combining with the actual situation, the paper analyses the existing problems of small and medium-sized enterprises in China in a systematic way in order to come into a conclusion that the private equity will effectively improve the company's ownership structure, clear property right, standardize the incentive system and improve the decision-making mechanism. So through the private equity will prompt the company's financial situation and improve the internal and external governance development, this will be the foundation for the growth of small and medium-sized enterprises.