Exploring the Asset–liability Ratio Financial Management of Small and Medium-Sized Enterprises Under Dynamic Nonlinear System

Abstract

The purposes of this paper are to analyze the financial management and influencing factors of small and medium-sized enterprises (SMEs) and explore the nonlinear relationship in enterprises’ financial market structure. The small and medium-sized enterprises in Eastern and Western China are taken as the research objects. First, the relationships between asset–liability constraints and financial management are discussed, analyzed, and explained. The development of enterprises’ financial management under the asset–liability constraints system is emphasized. Second, a self-adaptive nonlinear dynamic system is proposed based on dynamic surface control and the multi-directional and uncertain control of the financial market structure. Finally, a dynamic nonlinear panel estimation model for enterprises is constructed based on the nonlinear system. The simulation and empirical analysis results confirm that the proposed nonlinear system is useful in dynamic, uncertain control problems. The statistical results of the three primary indicators, economic variables, financial indicators, and control variables, reveal the significant regional differences of different financial market structure indicators. Model estimates based on the three key sub-indicators, the leverage ratio, return on assets, and debt interest rate, reveal the differences in financing and leverage ratio of small and medium-sized enterprises located in the eastern and western regions. SMEs in Eastern China are taken as examples; the direct financing rate and insurance proportion are negatively correlated with the leverage ratio and debt interest rate. In contrast, they are positively correlated with asset returns. In conclusion, there are noticeable differences in the financial market structure between different regions.