Research On The Guiding Role Of Government In Venture Capital Finance: An Economic Analytical Model

The guiding role of the government in financing influences the utility of the venture capital supplier, thus brings about changes in the capital supply in venture investment market. Therefore, the law of such economic influences can be studied by establishing a micro-economic analytical model which includes the guiding activities of the government in financing. Usually, the guiding activities of the government in financing can be presented as a specific financial product in financial economics, which can be designed and priced using the theories and methods in financial engineering, thus the feasibility and the scientificity of the guiding role of the government in venture capital finance can be improved. In order to obtain the above purposes the research work of the dissertation is designed to compose three major parts:The first part:On the basis of field research and the study on vast related literatures as well as policies and regulations both domestic and overseas, the author does the literature review and the analysis of government's guiding activities in venture capital finance. The gathering, combing and sorting of the promotive activities and the stimulative measures of the government in guiding present venture capital finance provides the research basis and the analytical framework for establishing a microeconomic theoretical model.The second part:First, the author establishes a basic"two phase"(the stage of initial investment and the stage of investment return) model which encompasses two types of investors (including"venture capitalist") and three types of investable assets (including"venture capital") utilizing model. Further, a new market participant– government– is added in the analytical framework. After the description and explanation of a series of hypotheses and restrictive conditions on the guiding work of the government in venture capital finance, an expanded model (3 types of investors) with the guiding role of the government is established;Then, the measures and activities of the government in promoting and stimulating venture capital finance are modelized and abstracted, which forms an"activity set"of economic meaning. The influences of different guiding activities of the government in venture capital finance on the"three types of market participants","two markets"and"social welfare"are analyzed using the expanded model;Finally, the norms and principles with economic meaning are established, based on which the economic efficiencies of the theoretical guiding activities of government in venture capital finance are appraised and compared, thus the appraisal of the economic efficiencies on different government promotive measures in financing is drawn. The research results drawn from the study of the theoretical model are proved and further elaborated (directly or indirectly) after the empirical analyses using available data and practical materials. Thus, the economic law on the government's role in the financing stage of venture capital investment is deeply engraved, and the related academic theories are extended and developed.The third part:Finally, according to the analytical results of the model and the basic rationale of financial engineering,"Venture Capital Bond", a financial product with high feasibility and easy operation quality in improving and enhancing the efficiency of the government in intervening in venture capital finance is designed, and"Expected Return Sharing System", a reasonable and effective system on the issue is put forward.