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Research On The Effect Of Government-backed Venture Capital On Funded Enterprise

Posted on:2016-06-07Degree:DoctorType:Dissertation
Country:ChinaCandidate:B LiFull Text:PDF
GTID:1109330464962391Subject:Public Finance
Abstract/Summary:PDF Full Text Request
Venture Capital is essentially an investment regime which obtains the return on investment by supporting technical enterprise innovation activities. From the practice of abroad, venture capital provides financing channel for SMEs which engaged in the development of high-tech development, promote the technological progress and innovation, and has played an important role in promoting high-tech industry development and economic growth. Building an innovative country is the inevitable choice for China’s modernization, in addition to technical innovation, we also need financial support. However, due to the lack of pledge assets, small-scale, high market risk and other characteristics, innovative companies hardly can get funds from the traditional financial sector; venture capital has become the main source of funding.Recalling the development of risk investment in the history of the world, governments have played an important role, especially venture capital market in China. After 20 years of development, China’s venture capital industry is still in the stage of development. Since the 1990s, the number of venture investment in China has experienced growing by leaps and bounds, but compared with risk investment of developed countries in Europe and the United States, in terms of the quantity, risk investment and the number of SMEs are still a big gap. But in the future, affected by the China sustained and rapid economic growth, the risk of investment in the China will get further development. From the beginning, the risk of investment in China is born with a strong government colors. The first VC firm-China New Technology Venture Investment Corporation is funded by the government in 1985. Discussing the impact of investments guided by the government on the funded enterprises, especially the effect on management of enterprises, plays an important role on repositioning the status of government in venture capital.This paper will draw on existing research results and the successful practice experience at home and abroad, combined with the environmental characteristics of China venture capital, apply theoretical and empirical test, study and explore the effect of venture capital with the background of government on IPO, business performance and liquidity management, conduct a comprehensive and in-depth discussion on the role of government for the development of the venture capital market, provide a theoretical basis and policy recommendations to promote the development of China’s venture capital and give full play to the role of government. Full text reads as follows:First of all, sorting out the theme of this article and the literature at home and abroad. First, through the comprehension of domestic and foreign literature, we found that the main theoretical basis of risk capital in effect is the reputation theory, adverse selection hypothesis, Certification hypothesis theory. Therefore this paper focuses on the three theories throughout the full text. Secondly, because of the risk capital companies listed herein IPO, performance and impact on liquidity management is placed under the market economy framework for analysis, with interdisciplinary characteristics, so research focused on induction of venture capital in the interdisciplinary. Finally, analysis risk capital how to through IPO, intervention time point in the listing Corporation performance under the market economy, which highlights the practical significance of this article.Second, making theoretical and empirical analysis of the IPO effect of risk investment under the government intervention. In this paper, we use entrepreneurs and small plates as sample, divide them into two categories:One is those companies with IPO effect test of venture capital and risk capital support, another is the sample of venture-backed companies which are divided into venture capital-backed government and non-governmental venture capital backed companies IPO underpricing effect. According to the derived of authentication theory, there are two assumptions, one is IPO underpricing with venture backed lower than those without risk investment support, the second is the certified role in enterprise IPO process of venture capital with government backed not as good as non-governmental risk investment institutions. In this chapter, by using multiple regression analysis method, to control enterprises listed years, per share issue expenses, underwriter reputation, issuing scale of IPO, earnings and other variables, we analysis of the impact of risk capital and government venture capital involvement on the rate of IPO underpricing, the empirical results support the authentication theory.Third, making theoretical and empirical analysis of the impact of government-backed venture capital intervention on the performance of listed companies in different time points. According to statistical and econometric analysis, this chapter verifies whether the risks investment intervention time point can significantly affect the company’s performance in the stock market, including stock returns (secondary market), which is explained from the difference from three aspects, the result from the company’s accounting, corporate governance structure and risk investment strategy. The difference of time that involves in the venture capital underpins the internal logic of this chapter; it will affect the company’s corporate governance and management, and will affect the company’s accounting performance, which ultimately reflected in the company on the performance differences in the stock market. Based on the investment intervention time point, this chapter will divide all the risks investment intervention time points into four categories:seed, introduction, growth, maturity.Fourth, analyzing the impact of the government background of venture capital to the liquidity management of listing Corporation. In order to verify the impact of government-backed venture capital on liquidity management of listed companies, the paper carried two empirical. One is based on the theory of financing constraints constructed Cash-Cash flow sensitivity model, compares the financing constraints degree of full sample, risk free capital involvement, government-backed venture capital involvement and non-government-backed venture capital involvement. Secondly, construct the model of cash holdings based on the cash holdings preventive motivation theory, and further compared the motive of the four samples of cash holdings. Empirical study found that, with government-backed venture capital involvement, not only makes financing constraints are involved in sample was significantly lower than the sample, below the risk-free capital involved in sample, even lower than non-government-backed venture capital intervention, thereby implying government-backed venture capital involvement, which greatly improved the company’s liquidity is invested, has a good "signal display" function.Fifth, putting forward policy suggestions to promote the development of China’s venture capital industry. This paper argues that the Chinese government plays a construction, supervision, guidance and direct participation of venture capital market, and how to implement the above features. This chapter improves the government’s venture capital industry in the development of the external environment, the internal mechanism of policy recommendations. External environment mainly from the legal system, culture environment of risk investment, internal mechanism mainly from the improvement of the relationship between government and risk investment institutions, and the relationship between risk investment institutions and funded enterprises.
Keywords/Search Tags:Government-Backed, Venture Capital, IPO, Liquidity
PDF Full Text Request
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