Analysis on Financing Difficulties for SMEs due to Asymmetric Information

Authors

  • Cheng Huang Guangdong University of Technology
  • Ya When Guangdong University of Technology
  • Zhifei Liu Guangdong University of Technology

DOI:

https://doi.org/10.18034/gdeb.v3i1.174

Keywords:

Small and medium enterprises, information asymmetry, adverse selection, moral hazard, financing strategies

Abstract

Financing is the bottleneck that restricting the development of China's small and medium enterprises. The root cause of financing difficulty for SMEs is the serious information asymmetry that exists between financial institutions, which lead to adverse selection and moral hazard. In this paper, financing theories of SMEs information dissymmetry and credit rationing theories are used to analyze the financing difficulties for SMEs and financing strategies to crack financing difficulty are proposed.

JEL Classification Code: D82, G32

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Author Biographies

  • Cheng Huang, Guangdong University of Technology

    School of Management, Guangdong University of Technology, Guangzhou, CHINA

  • Ya When, Guangdong University of Technology

    School of Management, Guangdong University of Technology, Guangzhou, CHINA

  • Zhifei Liu, Guangdong University of Technology

    School of Management, Guangdong University of Technology, Guangzhou, CHINA

References

Li, W. and Cheng, J.H. (2005). Financing feasibility analysis of small and medium-sized enterprise based on asymmetric information. World Economy, no.11, PP.71-77.

Wang, F.R. (2012). Analysis on SMEs’ financing difficulties under asymmetric information, China Securities and Futures, no.10, PP.267-268,.

Zhong, B.(2008). Economic analysis on the financing difficulty of small and medium enterprises: based on the perspective of information asymmetry. Economist, no.01, PP.225-226.

Zhong, T.L. and Ming, Y.X. (2003). Information asymmetry and market failure in small and medium enterprises financing. Accounting Research, no. 8, PP.42-44.

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Published

2014-06-30

Issue

Vol. 3 No. 1 (2014): January - June Issue

Section

Articles

License

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How to Cite

Huang, C. ., When, Y. ., & Liu, Z. . (2014). Analysis on Financing Difficulties for SMEs due to Asymmetric Information . Global Disclosure of Economics and Business, 3(1), 77-80. https://doi.org/10.18034/gdeb.v3i1.174
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