| The economic development of China has entered a new normal characterized by changes in growth rates,structural optimization,and dynamic transformation in recent years.“Mass entrepreneurship and innovation" is instilling new vitality into our country's new economic system.Venture capital(VC),as the "incubator" of high-tech industries,has developed rapidly.At the same time,the operation of China's GEM board in 2009 marked the establishment of a multi-tiered capital market in China,which provided a complete IPO exit channel for the development of VC in China.IPO exit has always been regarded as the best exit method for VC.Therefore,most of the research on VC are focus on value-added and impact of the Pre-IPO VC investment.However,the data shows that VCs do not immediately completely exit after the IPO.Between 2006 and 2016,40% of VC in China still held shares of their investment companies after three years of IPO.Therefore,the rapid development of VC not only has a major impact on the Start-ups and Pre-IPO companies' corporate governance,but also remains as an important participant in Post-IPO companies.Due to the short opening time of China's financial market and related regulations are imperfect,the IPO market is chaotic.It is common for IPO companies to commit illegal,fraudulent,and performance changes,which has caused minority investors to suffer huge losses and has a bad influence on our emerging financial markets.Does the VC continue to help the enterprise to value added,and achi eve the win-win between the enterprise and the investor,or to dilate the blind purpose under the grandstanding,and interfere with the normal order of the capital market through the insider information,thereby influence the stability of the financial mar ket? This dissertation studies the impact of China's VC on corporate governance of listed companies under the current economic and financial background,and provides a theoretical basis and a realistic basis for the development of VC in China.This dissertation combines theoretical and practical research as the framework.First,the relevant literature on the impact of VC on corporate governance is reviewed;the game theory model is built on the basis of incomplete contract theory,dual principal-agent theory,and signalling theory by elaborating the operational process of VC,and a detailed discussion is made on the mechanism of the impact of VC on the corporate governance of listed companies.Then,this dissertation empirically explores the impact of VC on corporate governance of listed companies from the three dimensions of earnings management,executive compensation,and excess management cost.VC has entered the final stage of IPO exit after supporting the listing of enterprises.Shareholding is not for the purpose of obtaining corporate control.VC shows a strong "grandstanding motivation"First of all,during the period of holding shares,VC will significantly increase the accrued earnings management of listed companies in the current period.And the hi gher the proportion of VC holdings,the higher level of earnings management of the company.In order to obtain the maximum gains from the reduction,through their rights at the board of directors or general meeting of shareholders,VC exerts pressure on th e management and adopts positive earnings management to whitewash the accounting performance during the shareholding period.Therefore,VC holdings deteriorates the quality of earnings management of listed companies.VC plays a significant positive role in the executive compensation level of listed companies.There are two factors that cause high level of executive compensation.First,there is a lack of an effective "supervision" system,which aggravates the problem of principal-agent.Second,there is a compensation for executives' personal capabilities and performance.Further exploration of the pay-performance sensitive of executives helps distinguish the two factors.Empirical evidence shows that the RET payperformance sensitive of VC to executive compensation is significant,while the ROA pay-performance sensitive is not significant.Therefore,after the VC investment in the enterprise IPO,it is focus on shot-term interests of the company,but has no time to take the long-term interests of the company into account,and does not form effective supervision over the executive compensation system of the company.During the period of holding listed companies,VC significantly aggravated the excess management cost of listed companies.The excess management cost is a proxy variable of rent-seeking on accounting.Rent-seeking can provide enterprises with certain political advantages and bring performance improvements in the short term.However,it may crowd out the R & D expenses and other productive expenses of enterprises,and eventually decrease the long-term value of enterprises.Through the measurement of excess management cost of listed companies,the empirical analysis shows that the VC does not play the role of "supervision",but has worsened the corporate governance,and the excess management cost of listed enterprises has increased significantly.Different VC institutes show the different motivation on rentseeking.The effect of state-owned VC on enterprise rent-seeking is not significant.Rent-seeking of private VC and foreign VC backed firms have been increased significantly,and rent-seeking of foreign VC backed firms are more serious.After the combining theoretical and empirical tests,this dissertation draws a conclusion that China's VC,after supporting the enterprise IPO,shows a strong " grandstanding motivation",and then worsens the corporate govern ance of the enterprise.Based on this conclusion,in order to promote the benign development of China's VC industry,which can play the role of "regulation" and "certification",this dissertation proposes to promote the diversification of VC funds sources,optimize the organization of VC institutions,strengthen the supervision of VC institutions,consummate the market listing system,and strengthen external audit of listed companies. |
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