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The novel mechanism of financing effect on companies development empirical study

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  • Siwei Tao
  • Xiuling Yuan

Abstract

As China’s economy continues to expand rapidly, the demand for capital among enterprises has surged, leading to an increased preference for short-term loans intended for long-term investments. An analysis of relevant data reveals that utilizing short-term financing for long-term projects positively influences the leverage of non-financial listed companies. Notably, private enterprises experience greater benefits compared to their state-owned counterparts. While short-term loans effectively enhance short-term leverage, their impact on long-term leverage appears to be minimal. Consequently, it is advisable for businesses to select financing strategies that align with their specific circumstances and to enhance their financial management practices to create new funding avenues. Additionally, there is a call for the government to bolster support for private enterprises. These findings hold significant implications for guiding financial decision-making and management in enterprises.

Suggested Citation

  • Siwei Tao & Xiuling Yuan, 2025. "The novel mechanism of financing effect on companies development empirical study," PLOS ONE, Public Library of Science, vol. 20(7), pages 1-15, July.
    • Handle: RePEc:plo:pone00:0326934
    DOI: 10.1371/journal.pone.0326934
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    References listed on IDEAS

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    1. Przemyslaw Kowalski & Max Büge & Monika Sztajerowska & Matias Egeland, 2013. "State-Owned Enterprises: Trade Effects and Policy Implications," OECD Trade Policy Papers 147, OECD Publishing.
    2. McCahery, Joseph A. & Vermeulen, Erik P.M., 2010. "Corporate Governance of Non-Listed Companies," OUP Catalogue, Oxford University Press, number 9780199596386.
    3. Jan Kregel, 2007. "The Natural Instability of Financial Markets," Economics Working Paper Archive wp_523, Levy Economics Institute.
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