Research on Financing Issues of Private Enterprises in China

Author: Fu Ge
Publisher:
Publish Date: 2003-10-01
Features: This book focuses on the financing of private enterprises as its research subject, analyzing and studying the characteristics of private enterprises' financing behavior and exploring ways to further improve the financing environment and behavior of private enterprises from the perspectives of financial system analysis and private enterprise behavior. The book is divided into six chapters and primarily employs a combination of dialectical materialism and statistical empirical methods for analysis and research.
Key Features of the Book:
1. Close Integration of Theory and Practice. The book does not isolate theoretical discussions from the social realities of China's private enterprise development. Instead of merely elaborating on theory for the sake of theory, it appropriately analyzes, refines, and elevates theories while describing social phenomena, elevating them to a certain level of theoretical understanding. As a result, the book is highly readable. This feature likely benefits from Dr. Fu Shi's experience in the financial industry and his rich social background.
2. Comprehensive Evidence and Rich Information. This book demonstrates the author's extensive research and investigative work on the topic. Not only has the author delved into social realities, but they have also explored the inner workings of enterprises, resulting in a deep understanding of China's financial system and the environment in which private enterprises develop. In its arguments, the book not only provides rigorous logical and normative analyses but also offers a wealth of data, charts, and corresponding statistical analyses. These include both horizontal regional comparisons and vertical historical comparisons, making the arguments highly persuasive.
3. Originality and Practical Value. The book proposes a series of insightful viewpoints and recommendations, such as:
- The obstacles in private enterprises' indirect financing are systemic barriers and obstacles from relevant market participants.
- In direct financing, the obstacle lies in the implicit government guarantee contracts under which soft-budget-constrained state-owned enterprises squeeze hard-budget-constrained private enterprises out of the securities market.
- Private enterprises choose different financing structures to achieve the optimal balance between agency costs and control rights, thereby improving corporate governance. Financing is not the ultimate goal.
- The optimal financing sequence for private enterprises should be: internal fundraising—issuing bonds—issuing stocks—bank loans.
- The primary reason for the irrational financing structure of private enterprises in China is systemic constraints.
- Greenlighting the development of private enterprise property rights systems.
- Innovating the stock market system to facilitate private enterprises' financing through IPOs.
- These viewpoints and recommendations hold significant inspirational value.
- The book also offers many practical suggestions and ideas, such as countermeasures to promote bond financing for private enterprises and creating conditions for private enterprises to access IPOs through institutional innovation. These are all directions aligned with the development of the current financial market and private enterprise strategies.