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The Dynamics of Listed SMEs in China

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  • Jia Liu

Abstract

We examine the dynamics of Chinese listed SMEs with respect to their post-market viability and growth after going public. The Kaplan--Meier estimation shows that SMEs are more likely to transition to a non-viable state than large firms. Further examination using the Cox model and the random effects model shows that SME dynamics are shaped by heterogeneous firm and industry characteristics, as well as the underlying financial and institutional environments. SME viability is distinguished by its ability to grow through learning along with age, aided by lower business risk, more focused business, easier access to equity finance, and less exposure to competition in remote regions. SME growth is constrained by a dispersed ownership structure, insufficient infrastructure to protect firms which are active in R&D, and the limited financing role of equity markets. The study also reveals that government initiatives in support of strategic development in the service industries and in the coastal regions are of importance in spurring SME growth .

Suggested Citation

  • Jia Liu, 2012. "The Dynamics of Listed SMEs in China," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 19(3), pages 421-450, November.
    • Handle: RePEc:taf:ijecbs:v:19:y:2012:i:3:p:421-450
    DOI: 10.1080/13571516.2012.715274
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    1. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, April.
    2. Henrik Hansen & John Rand & Finn Tarp, 2004. "SME Growth and Survival in Vietnam: Did Direct Government Support Matter?," Discussion Papers 04-13, University of Copenhagen. Department of Economics.
    3. Eickelpasch, Alexander & Lejpras, Anna & Stephan, Andreas, 2007. "HARD AND SOFT LOCATIONAL FACTORS,INNOVATIVENESS AND FIRM PERFORMANCE - an empirical test of Porter’s diamond model at the micro-level," Working Paper Series in Economics and Institutions of Innovation 109, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
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    1. Oleksandr Talavera & Charlie Weir & Lin Xiong, 2017. "Time Allocation and Performance: The Case of Chinese Entrepreneurs," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 24(1), pages 27-51, January.

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