What factors influence SMEs' equity financing: A systematic literature review and future agendas

Accessing financing sources is crucial for the survival of SMEs. While ample studies have been conducted on enterprise equity financing, the research focus on the small and medium enterprises (SMEs) segment remains limited. Due to the unique characteristics of SMEs, such as small scale, irregular operations, and poor risk resistance, equity financing is a challenging task for them. This study aims to explore what factors influence SMEs financing. To achieve this, we employ the systematic review method：PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-analyses) and content analysis, utilizing databases of Web of Science and Scopus. In the research, eight research dimensions of SMEs equity financing are pooled from 114 related papers. In this study, we identified key research dimensions and factors in SMEs equity financing, providing a framework for future studies on corporate equity funding. These dimensions include financial performance, external environment, innovation, human factors, corporate heterogeneity, information disclosure, strategy, and sustainability. By conducting a thorough analysis of influencing factors, we propose future research agendas and offer future research questions addressing emerging trends in SME financing studies, including social media in reducing information asymmetry and the potential use of AI in assisting investment decisions for SMEs financing. These insights provide valuable guidance for SMEs accessing funding, investors' decision-making, and policymakers shaping supportive environments for SMEs.