A Study of the Impact of Private Equity Funds on the Value of SMEs

Xinyi Zhou

doi:10.54097/x331g719

Authors

Xinyi Zhou

DOI:

https://doi.org/10.54097/x331g719

Keywords:

Private equity funds; SMEs; value.

Abstract

Private equity (PE), a type of equity investment in unlisted companies, has gradually become more popular in the domestic market as a result of China's economy's rapid development. According to certain experts, private equity significantly affects businesses. Less research has been done, though, on how private equity funds affect business value. The focus of this article is therefore the impact of PE on the valuation of SMEs. Based on the GEM data from 2019 to 2022, the empirical analysis of the results by means of multi-linear regression model indicates that the value of private equity firms is higher than that of non-private equity investors, and the lower the balance sheet ratio, the higher the return on net assets ratio, or the higher the research and development intensity of the enterprises participated by private equity institutions, the more conducive it is to increase the value of small and medium-sized enterprises.

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