Research On The Effects Of Venture Capital Networks On Investment Decision Making In China

The development of the venture capital market is in sync with the innovation of the technology.Venture capital has become an important capital force to promote the transformation of scientific research achievements and to support the development of innovative and entrepreneurial enterprises.At present,the positive effects of venture capital on promoting the development of innovative economy have been widely recognized by the countries of the world and highly valued.China's venture capital industry has entered a new stage of adjustment after experiencing rapid development.Constructing a venture capital network that integrates innovations in technology,capital,talents,management,etc.,helps to realize the redistribution of venture capital in different project phases,different investment industries and different investment regions.This is an important way to fulfill the original intention of China's macroeconomic policy regulation under the new economic situation and to promote the development of investment capital to support the real economy.Therefore,whether China's venture capital network operates efficiently and whether it has achieved the expected results and effects of guiding investment decisions of venture capital institutions require more accurate,more detailed and more dynamic research.The purposes of this dissertation are to improve China's venture capital network and optimize venture capital investment decision.This paper follows the research agenda of theoretical framework,mechanism analysis,situation analysis empirical analysis and suggestions,focusing on the theory and practice,and serving policy makers and venture capital institutions.First of all,this paper constructs a framework of systematic and comprehensive theory and institutional analysis,and clarifies the internal mechanism of the venture capital network affecting investment decisions.The venture capital network is a cooperative relationship between venture capital institutions and their stakeholders.It has three functions,two capabilities and three major influence mechanisms.The three functions are to alleviate information asymmetry in transactions,to integrate resources to promote project value-added and to reduce investment risks;two major capabilities,namely network resource connectivity and network resource control capabilities;three major impact mechanisms,namely resource sharing mechanism,value added mechanism and risk sharing mechanism.The relevant theories of venture investment network affecting investment decision-making include weak connection theory,strong connection theory,embedded theory,social resource theory,transaction cost theory,modern portfolio theory,principal-agent theory,enterprise life cycle theory,bounded rationality theory,and information asymmetry theory.Venture capital institutions rely on the three major functions of the network to achieve connection with other institutions,use their own two network capabilities to expand resource coverage,and ultimately utilize three major mechanisms to affect the outside world.Secondly,this paper analyzes and studies nearly 40,000 venture capital data,and comprehensively explores the investment decision characteristics of China's venture capital institutions.This paper builds a composite network measurement model including network centrality and network structural hole based on the two network capabilities of the organization,and draws the evolution map of each year's annual venture capital network in China.The study finds that: from the perspective of the industry,China's venture capital industry is currently in a period of adjustment after rapid development.The number of venture capital institutions and the total amount of management capital continue to grow.And the total number of venture capital projects increased.The institutions mainly exited through IPOs and mergers and acquisitions.From the perspective of institutional investment decision-making characteristics,venture capital is concentrated in information transmission,software and information technology services,manufacturing,finance and other industries,and is concentrated in Beijing,Shanghai,Shenzhen and other places,and the distribution of investment stages tends to be balanced.From the network measurement results,the overall scale of China's venture capital network is expanding,but the distance between institutions increases,the accessibility decreases,the average control ability of the organization weakens,and the network quality does not improve.Thirdly,this paper constructs a dynamic analysis framework of how venture capital networks influence investment decisions.The investment decision studied in this paper is a dynamic process,including two stages.The first stage is how the organization makes decisions before the decision.In this paper,the double fixed effect model and the panel Logit model are used to study the impact of venture capital network on investment decision.By constructing an empirical model of network centrality and network structural holes influencing investment stage decision-making,investment industry decision-making and investment regional decision-making,this paper finds that: under normal circumstances,the stronger the network resource connection capability and network resource control capability of the venture capital institution are,the greater the probability that the organization will intervene in the investment later in the project will be,and the more scattered the capital will be invested in industry and region..The second stage focuses on the impacts of investment decisions.This paper studies the performance of investment decisions.Using the panel threshold model,this paper constructs an empirical model of how investment decisions affects investment performance by using network centrality and network structural holes as threshold variables.The study finds that venture capital institutions can increase investment performance by investing in the late stage of the project,but appropriate development of venture capital network can guide the venture capital institution to participate in the investment phase without affecting investment performance;venture capital institutions can promote investment performance by adopting concentrated investment or concentrated investment in the industry,and appropriate development of venture capital network can effectively enhance this promotion.Therefore,policy makers should focus on,monitor,and appropriately develop the scale and the quality of venture capital networks,and guide the venture capital institutions to move forward in the investment phase.Under the dynamic rectification mechanism of investment decisionmaking,based on the two-stage empirical results,When venture capital institutions have strong network resource connection capability and network resource control capability,they should pay attention to avoid the inertia of industry and geographically dispersed investment,and adopt industry concentrated investment and regional concentrated investment to improve investment performance.Finally,based on the above theoretical and mechanistic analysis,realistic investigation and empirical analysis,this paper proposes relevant countermeasures from three aspects: overall path design,external environment optimization and internal factor improvement,to improve the quality of China's venture capital network,to optimize investment decisions of venture capital institutions,to promote the development of the venture capital industry,and to enhance the ability and efficiency of the venture capital to serve the real economy.