12,000

We have over 12,000 students, from over 100 countries, within one of the safest campuses in the UK

93%

93% of Lancaster students go into work or further study within six months of graduating

Home > Research > Publications & Outputs > Financing high-tech SMEs in China
View graph of relations

« Back

Financing high-tech SMEs in China: a three-stage model of business development

Research output: Contribution to journalJournal article

Published

Journal publication date04/2011
JournalEntrepreneurship and Regional Development
Journal number3-4
Volume23
Number of pages18
Pages217-234
Original languageEnglish

Abstract

This article examines the financing of high-tech Small and Medium-sized Enterprises (SMEs) in China at different stages of business development, based on a survey of 74 face-to-face interviews with high-tech SMEs and additional nine informal face-to-face interviews with bank and government officials in the two Chinese provinces of Guangdong and Guangxi. Attention is focused on distinguishing different financing methods according to particular stages of an SME's business life cycle. The findings show the importance of informal financial sources from individuals and firms’ employees for high-tech SMEs at all three development stages. Such sources have become a central aspect of the financial infrastructure for the private sector in China. The article distinguishes between the alternative methods or practices used by firms at all three stages, seeking to either overcome particular financial constraints or to avoid the commitment of large capital investments in relatively long-term projects. It identifies the absence of demands and a gap for medium- and long-term funding for high-tech SMEs, placing a serious barrier on the ability of high-tech SMEs to engage in R&D for making more fundamental innovation and developing new/distinctive products. It concludes by making the implications of these findings for China, and internationally.