The Determinants of the Capital Structure of Listed SMEs in China: Empirical Evidence from SME Board

This article utilizes up-to-date financial data of 38 listed small and medium sized enterprises in SME Board, to test various hypotheses concerning the determinants of SMEs capital structure, before and after these companies listed in SME Board. Empirical results show that SMEs employ mostly short-term liabilities to finance their operations. Financial leverage is found to be related positively to company size, assets cover and negatively to market competition before its listing. While after the listing, the financial leverage is related positively to company size, growth and negatively to management efficiency. Profitability, non-debt tax shields, solvency, financial distress cost seems to have no significant impact on the capital structure of Chinese SMEs.