Precautionary Savings, Financing Deficit Sensitivity, and Investment Behavior of Micro and Small Enterprises: A Cross-Country Comparison

Haoran Yu

doi:10.47297/wspdecWSP2515-797305.20261005

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Precautionary Savings, Financing Deficit Sensitivity, and Investment Behavior of Micro and Small Enterprises: A Cross-Country Comparison

Volume 10, Issue 5

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Precautionary Savings, Financing Deficit Sensitivity, and Investment Behavior of Micro and Small Enterprises: A Cross-Country Comparison
Precautionary Savings, Financing Deficit Sensitivity, and Investment Behavior of Micro and Small Enterprises: A Cross-Country Comparison
Guizhou University, Guiyang, Guizhou, 550025, China
Vol. 10, Issue 5, Pages: 26-31(2026)
Online First：14 August 2026，

Published：30 May 2026
DOI：10.47297/wspdecWSP2515-797305.20261005
Accepted：

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Yu Haoran.Precautionary Savings, Financing Deficit Sensitivity, and Investment Behavior of Micro and Small Enterprises: A Cross-Country Comparison[J].Development Economics of China,2026,10(05):26-31.
DOI：

Yu Haoran.Precautionary Savings, Financing Deficit Sensitivity, and Investment Behavior of Micro and Small Enterprises: A Cross-Country Comparison[J].Development Economics of China,2026,10(05):26-31. DOI： 10.47297/wspdecWSP2515-797305.20261005.

摘要

Abstract

Micro and small enterprises (MSEs) constitute the most vibrant segment of the national economy

yet the financing risk inherent in their investment decisions remains under-examined. Building on precautionary savings theory and the financing deficit hypothesis

this paper compares the internal financing behavior of Chinese and U.S. MSEs using World Bank Enterprise Survey (WBES 2024) data on roughly 3

900 firms in the fully specified regressions. Three findings emerge. First

after full controls

Chinese MSEs' internal financing dependence is about 6.3 percentage points lower than that of U.S. MSEs (p < 0.001). Second

the marginal response to financing obstacles in China (-5.792) exceeds the U.S. response (-4.563) by 27%

concentrated among mixed-financing firms (median-regression interaction -12.50

p < 0.001). Third

bank credit lines relieve internal financing dependence more strongly in China

whereas collateral requirements partially offset this releasing effect. This paradox of moderate perceived financing difficulty but sharper behavioral responses to financing shocks motivates institutional reforms in financial regulation

credit infrastructure

and policy coordination to reduce MSEs' financing vulnerability.

关键词

Keywords

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