The Research On The Spatial Agglomeration And Spillover Effect Of Venture Capital

Numerous studies,both in China and in other countries,have proved that the development of Venture Capital(VC)has critical significance for promoting the development of innovation and entrepreneurship activities in a country.However,the current theories related to VC are mainly concentrated in the corporate finance in the micro-level field.The analysis from the macroeconomic perspective on the determinants of VC and the impact of VC on regional economic growth,innovation and employment remains in a blank.This paper innovatively matches the data of VC investments' time,location and amount with the urban macroeconomic data where these VC investments happpened,and introduces the theories of spatial agglomeration and the spatial econometrics empirical methods into the analysis of VCs' determinants and influences.It fills the research gap in analyzing the spatial agglomerati on and spillover effects of VC investment in China in the analytical framework of urban development.Through a detailed summary of the development history and current situation of China's VC,and a comprehensive comparison with the development process of foreign VC,this paper finds that the growth rate of China's VC has slowed down,and the VC funds are highly polarized in eastern developed regions;the Government Guidance Fund(GGF)has become an important participant in China's VC investment;the early stage of VC investment in China is insufficient,the phenomenon of quick success in the VC industry is obvious and prevailed;the pursuit of professionalism and innovation is decreasing and VC has gradually become a regular tool to supplement local investment.By ultilizing the sta tistical methods such as plotting VC investments' spatial phase map,Herfindahl index,spatial Gini index and geographic concentration index,this paper measures the spatial agglomeration degree of China's VC investment from 2000 to 2015 and finds that Chi na's VC has a trend of continuous spatial proliferation developed over the y ears.By using the methods of spatial econometrics such as Moran's I index,spatial autocorrelation model and spatial Dubin model,this paper analyzes the key determinants affecting the spatial distribution of VC from the perspective of space-time dynamics.The total amount of GGFs,the number of invention patents granted,the number of successful IPOs,the proportion of college students in the total population of the city,the road pavement area per capita,and the risk investment activities of other cities in the previous year are all significantly and positively correlated with the activities of VC investment,indicating the innovation activities,the exit opportunities,the human capital level,the infrastructure construction and the VC activities in surrounding cities can significantly improve a city's VC investments.There is no sign of the new amount of GGFs in neighboring cities has a crowding out effect on the local VC activities.However,the increase in the innovation patents in the neighboring cities have a significant crowding out effect on the local VC activities,reflecting the competition of VC for high-tech firms and innovative projects.In addition,this paper also uses the fixed effect panel model,spatial autocorrelation model,spatial Dubi n model and other empirical methods to test the impact of VC on China's economic growth,innovation activities and employment levels in 282 cities from 2004 to 2015.The number of VC events in the city in the previous year,the number of newly established companies supported by VC,the level of government fiscal expenditure,and the increase in per capita GDP can significantly promote the city's economic growth in this year.VC can bring a greater impetus to local economic growth by investing in new enterpr ises.In the previous year,the number of VC events in the city,the number of new companies invested by VC,the total amount of venture investment in the year,the government's fi scal expenditure,the GDP per capita,and the fixed asset investment were si gnificantly positively correlated with the regional new invention patents.VC,government fiscal expenditure,per capita income level,and increased investment in fixed assets can significantly promote the development of a city's innovation activities.The number of VC events in the city in the previous year,the number of new companies invested by VC,the total amount of investment in VC,the proportion of college students in the l ocal population,the per capita GDP,the proportion of agricultural employme nt,and the population growth rate is significantly positively correlated,indicating that VC,education level,economic development level,industrial structure,and population gro wth have played an important role in the increase of employment in the region.Compared with the impact of VC on economic growth,the activities of VC in the local region can have a significant positive spillover effect on the innovation activities and emp loyment levels in the surrounding areas,which indicates that VC is an equit y investment that serves technological innovation and can support the construction of local enterprises to improve the employment significantly.It also have a significant positive spillover effect on the innovation activities and employment level of neighboring cities in China.