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Control Preference and Equity Financing Willingness of SME Owners--Evidence from Private SMEs in China |
YAN Jun LV Xin-ye |
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Abstract The paper explores the relationship between equity financing willingness and the control preference of the SME owners. 3268 samples are drawn from the 7th private enterprises survey. The research finds that about 72% SME owners are unwilling to obtain financing by equity. However, they would increase their equity share over time. We also find the significant positive relationship between the control preference and the equity-financing willingness of the owners. With the distinct individual-governance features, the low equity financing willingness means the lack of solid foundation for the policy toward promoting equity financing. Non-economic preference of the SME owners and the outside investors should be considered when we design financing mechanism.
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Received: 24 December 2009
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Corresponding Authors:
YAN Jun
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