| Mass entrepreneurship and innovation is an important driving force for the supply-side structural reform during the new normal of economic development in China.However,the serious financing constraints and management problems entrepreneurial firms faced restrict their innovativeness.Besides the direct funding,venture capital also provides value-added services for entrepreneurial firms,thus it is considered as a significant tool to promote technological innovation of entrepreneurial firms.But for one thing,the development of venture capital in China is rooted in the capital market institution and its development level,which inevitably exhibits different feature from foreign venture capital,thus influencing the effect of venture capital on entrepreneurial firms' technological innovation.Moreover,the effect is also influenced by the characteristics of venture capital such as the time of entry,investment type,background and reputation,and it is closely related to the degree of technological innovation and the dynamic effect of venture capital on technological innovation.However,existing researches are very limited.For another,the black box of the effect of venture capital on entrepreneurial firms' technological innovation has not yet been opened.In addition to the direct funding,venture capital also provides value-added services for entrepreneurial firms,which are the most important factors impact entrepreneurial firms' technological innovation,especially the financial value-added service and the managerial value-added service.So,whether venture capital provides financial and managerial value-added services for entrepreneurial firms and further promotes entrepreneurial firms' technological innovation?Few literatures make further research.Based on the feature that venture capital in China invests in entrepreneurial firms at late stage and the fact that venture capital provides financial and managerial services,we attempt to establish the theoretical model on the value-added effect of venture capital on entrepreneurial firms' technological innovation,and make an empirical test on the value-added effect of venture capital on entrepreneurial firms' technological innovation to provide the basis for the policies that promote entrepreneurial firms' technological innovation.Firstly,based on the model structure of Schmidt(2003)who explains convertible securities can solve double moral hazard problem in venture capital,we establish the theoretical model on the value-added effect of venture capital on entrepreneurial firms' technological innovation from two aspects to analyze the effect mechanism:For one thing,we boil down the self-interest behavior of entrepreneurial firm to entrepreneurial firm's effort and the self-interest management behavior of venture capital to venture capital's management effort,taking them into the probability function that affects the success of innovation project.By comparing entrepreneurial firm's optimal effort and the optimal profit of innovation project when venture capital doesn't devote management effort and devotes management effort under the condition of complete information and incomplete information,we try to reveal the managerial value-added effect mechanism of venture capital on entrepreneurial firms' technological innovation.For another,we further boil down the self-interest financing behavior of venture capital to venture capital's financing effort and take it into the production function applicable to the condition that the innovation project is successful.By comparing entrepreneurial firm's optimal effort and the optimal profit of innovation project when venture capital doesn't devote financing effort and devote financing effort under the condition of complete information and incomplete information,we try to reveal the financial value-added effect mechanism of venture capital on entrepreneurial firms' technological innovation.The results show that:(1)Due to the moral hazard problem of entrepreneurial firm under the condition of incomplete information,entrepreneurial firm's effort is insufficient,thus entrepreneurial firm's technological innovation is low.Venture capital's management effort can restrain entrepreneurial firm from moral hazard and stimulate entrepreneurial firm to devote more effort,thus improving the probability of success of innovation project and finally promoting entrepreneurial firm's technological innovation.(2)However,there still exists double moral hazard problem of entrepreneurial firm and venture capital under the condition of incomplete information,entrepreneurial firm's effort and venture capital's management effort are insufficient,thus entrepreneurial firm's technological innovation is still low.Besides directly improving the output of successful innovation project,venture capital's financing effort can further solve the double moral hazard problem and increase the management effort and stimulate entrepreneurial firm to devote more effort,thus improving the probability of success of innovation project and finally promoting entrepreneurial firm's technological innovation.This research makes up for existing literatures which neglect the financing value-added service that venture capital provides for entrepreneurial firms.Secondly,based on the manually collected information on venture capital and patent application,we reveal the feature that venture capital in China prefers investing in late-stage firms and analyze the value-added effect of venture capital on entrepreneurial firms'technological innovation from two aspects:For one thing,we empirically test the value-added effect of venture capital that enters into firms at late stage on entrepreneurial firms'technological innovation on the whole by using difference in difference propensity score matching method(PSM-DID).For another,taking the time when venture capital enters,the investment type of venture capital,the heterogeneity of technological innovation and the dynamic effect of venture capital on technological innovation into consideration,we test the value-added effect of venture capital with different characteristics on entrepreneurial firms'heterogeneous innovation using propensity score matching method(PSM).The results show that;(1)Venture capital in China prefers late-stage entrepreneurial firms,and on the whole,venture capital that enters into firms at late stage doesn't have value-added effect on the R&D investment and patent application of entrepreneurial firms,which means that venture capital that enters into firms at late stage doesn't have value-added effect on entrepreneurial firms'technological innovation.(2)However,for venture capital that enters into late-stage firms,first,venture capital that enters into firms earlier has value-added effect on entrepreneurial firms'technological innovation,radical innovation and incremental innovation,but the effect decreases gradually,and the value-added effect of venture capital on incremental innovation of entrepreneurial firms is greater than it is on radical innovation on the effect degree and persistent.Second,venture capital that enters into firms later has no value-added effect on entrepreneurial firms' technological innovation,neither on radical innovation nor incremental innovation.Third,compared to non-syndicated venture capital,governmental venture capital and low-reputation venture capital,the value-added effect of syndicated venture capital,nongovernmental venture capital and high-reputation venture capital on the technological innovation,incremental innovation and radical innovation is greater and more persistent.This research makes up for existing literatures which neglect the feature that venture capital in China prefers late-stage entrepreneurial firms,the heterogeneity of technological innovation and the dynamic effect of venture capital on technological innovation.Thirdly,based on the theoretical model of chapter 3,we go a further step to make an empirical analysis on the value-added effect of venture capital on entrepreneurial firms'technological innovation from the perspective of financial and managerial value-added services.For one thing,we test whether venture capital and its reputation provide financing value-added service for entrepreneurial firms by propensity score matching method and difference-in'differences method,and then using the mediation model test the financial value-added effect of venture capital and its reputation on entrepreneurial firms' technological innovation.For another,based on the manually collected data on entrepreneurial firms' senior executives that venture capital assigned,we use Heckman selection model to test the managerial value-added effect of venture capital and its reputation on entrepreneurial firms' technological innovation.The results show that:(1)On the whole,venture capital doesn't provide financial value-added service for entrepreneurial firms,including equity financing and debt financing,and doesn't have value-added effect on entrepreneurial firms' technological innovation.However,high-reputation venture capital provides equity financing value-added service for entrepreneurial firms and has value-added effect on entrepreneurial firms' technological innovation,moreover,equity financing plays a mediation role between venture capital and entrepreneurial firms'technological innovation.It displays that on the whole,venture capital has no financial value-added effect on entrepreneurial firms' technological innovation,while high-reputation venture capital has financial value-added effect on entrepreneurial firms' technological innovation.(2)Venture capital monitoring contributes to the improvement of entrepreneurial firms'technological innovation and merely high-reputation venture capital monitoring can improve entrepreneurial firms' technological innovation,which implies that venture capital,and merely high reputation venture capital has managerial value-added effect on entrepreneurial firms'technological innovation.This research probes more deeply into the financial and managerial value-added effect of venture capital on entrepreneurial firms' technological innovation and enriches the empirical research on the value-added effect of venture capital on entrepreneurial firms' technological innovation.Lastly,based on the above research,we put forward the following suggestions to drive venture capital to promote entrepreneurial firms' technological innovation:First,establish information disclose system of unlisted firms and inflict severe punishment on firms with violation disclosure of information,so as to mitigate the information asymmetry between venture capital and entrepreneurial firms.Second,to popularize registration system and perfect the delisting system,so as to restrain the behavior of speculation and arbitrage and finally drive venture capital to invest in early-stage entrepreneurial firms.Third,improve the risk prevention mechanism of venture capital and make government guide fund play its role of guiding to drive venture capital to invest in high-tech entrepreneurial firms at early stage.Fourth,establish the communication platform for venture capital and build a bridge of cooperation among venture capital institutions to alleviate information asymmetry and enhance mutual cooperation among venture capital institutions.Fifth,develop the venture debt to form a financing market for entrepreneurial firms' technological innovation,which is guided by venture capital and linked by various financing methods such as venture debt,PE,IPO,etc.,so as to meet the financing needs of entrepreneurial firms' technological innovation in subsequent stages. |
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