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Private equity and the risk-taking of small and medium-sized enterprises

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  • Yang, Siyuan
  • Du, Yunsu

Abstract

Utilizing data from companies listed on the Chinese Sci-Tech Innovation Board (STIB) and Growth Enterprise Market (GEM) from 2010 to 2022, this study investigates the impact of private equity (PE) on the risk-taking behavior of small and medium-sized enterprises (SMEs) and its underlying mechanisms. The findings indicate that PE significantly enhances firms’ risk-taking levels, mainly by easing the financing constraints and reducing the agency costs. Further heterogeneity analysis shows that the positive effect of PE is more pronounced in firms with higher levels of digitalization and lower supply chain concentration, highlighting the interplay between firms’ internal strengths and external capital.

Suggested Citation

  • Yang, Siyuan & Du, Yunsu, 2025. "Private equity and the risk-taking of small and medium-sized enterprises," Finance Research Letters, Elsevier, vol. 85(PE).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pe:s1544612325014497
    DOI: 10.1016/j.frl.2025.108194
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    References listed on IDEAS

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