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Research On Value-added Mechanism Of Venture Capital Firms Based On Human Capital

Posted on:2014-03-22Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y LiFull Text:PDF
GTID:1319330482954553Subject:Management Science and Engineering
Abstract/Summary:PDF Full Text Request
Venture capital (VC) can improve technical innovation and encourage the development of SME, which therefore realize the upgrading of industrial structure and economic prosperity. As the link between investors and new ventures, VC firms (VCFs) play a very important part. Compared with developed VC markets, Chinese VC market is characterized by diversity of subjects, fusion of culture and economic restructuring. In this situation, it's important to research the VCFs'investment behavior and the value-added effect. Hitherto foreign scholars have already made a number of researches from VCFs'level, but the results may not be applicable to Chinese condition. What's more, restricted by the effective data, the empirical research on VC within China is still in early stage and lack of research at firm-level.This paper combines the theory of human capital, TMT (top management team) with resource-based theory, analyzing and testing the ways of adding value realized by VCFs based on human capital of TMT. The research tries to answer the questions as follow:(1) the relationship between human capital of VCFs'TMT members and performance; (2) the relationship between human capital of VCFs'TMT members and investment strategies; (3) the relationship between investment strategies and performance; (4) the possible mediating and moderating effects in the relationship between TMT human capital and performance.With the summarizing of relative literature, we divide human capital into general and specific dimensions and divide investment strategies into screening and supervising strategies, and finally develop a series of research models and hypotheses. Our research adopts the empirical methodology and tests the hypotheses with SPSS and AMOS by considering 124 active VCFs in Chinese VC market.The empirical results find that human capital of VCFs'TMT influences the performance in direct and indirect ways. Firstly, the science/engineering education background and consulting, entrepreneurial and VC fund management experience of TMT members positively relate to the performance. Secondly, in the indirect relationship, (1) human capital of TMT members affect the choice of screening strategies. In specific, TMT members with science/engineering, entrepreneurial and international experience more likely choose ventures in early stage; members with science/engineering education background, VC fund management and science/ engineering experience will invest in industries with specialization; members with science/engineering education background more likely specialize the geographic scope. (2) The screening and supervising strategies can improve the performance. In specific, the screening strategies like industry and geographic scope specialization are positively related to investment performance. While the supervising strategies like syndication shows an inverted U-shaped relationship with investment performance, which indicates that a proper scale of syndication will improve the performance. (3) Based on the above results, our research tests the mediating and moderating effect of investment strategies. In specific, the science or engineering education background, international experience, entrepreneurial experience and science or engineering experience of TMT members will affect the performance through the mediating effect of screening strategies. Syndication shows a nonlinear moderating effect in the relationship between VC fund management experience, entrepreneurial experience and investment performance. Besides, staged financing strategy shows a moderating effect in the relationship between VC fund management experience and consulting experience of TMT members and investment performanceThis paper explores the influence mechanism of human capital of VCFs'TMT on investment performance under Chinese situation. Our research deepens the human capital theory, and will help to optimize the organization structure of VCFs and finally improve the investment outcomes.
Keywords/Search Tags:Venture capital firms, top management team, human capital, venture capital investment strategies, venture capital firms' performance
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