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CHINESE SMEs' USES OF FINANCIAL STATEMENTS IN DECISION MAKING

Author

Listed:
  • HOWARD VAN AUKEN

    (Department of Management 3363 Gerdin, Iowa State University Ames, Iowa 50011, USA)

  • KUI YANG

    (School of Accountancy, Shanghai University of Finance and Economics, No. 777, Guoding Road, Shanghai 200433, P. R. China)

Abstract

With a sample of 46 Chinese small to medium-sized enterprises (SMEs), this study examines factors that might affect firms' use of financial statements to make decisions. Financial statements contain insightful information about potential risk and return implications of various decisions. A logit analysis shows that owners of Chinese SMEs use financial statements to make decisions according to the frequency of available financial statement information and their ability to interpret the information contained in the financial statements. These results can help owners of SMEs, educators and service providers understand which factors affect the use of financial statements and the process by which financial statements are incorporated into SMEs' decisions.

Suggested Citation

  • Howard Van Auken & Kui Yang, 2014. "CHINESE SMEs' USES OF FINANCIAL STATEMENTS IN DECISION MAKING," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 19(04), pages 1-16.
    • Handle: RePEc:wsi:jdexxx:v:19:y:2014:i:04:n:s1084946714500277
    DOI: 10.1142/S1084946714500277
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    References listed on IDEAS

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