| Due to domestic resource and environmental constraints and international trade conflicts,China’s existing economic structure needs to be upgraded.Thus,China’s government put great emphasis on stimulating market innovation vitality and cultivating emerging industries in recent years.Venture capitals,focusing on investing in high-risk emerging enterprises,provide a new solution to the financing issues.However,venture capitals tend to concentrate in big cities,and the cross regional venture capital investment activities are seriously hindered by the spatial distance.In recent years,China’s transportation network represented by high-speed rail and aviation has developed rapidly,effectively reducing the travel time between cities.Therefore,this study focus on the impact and mechanism of inter-city transportation network on cross regional venture capital investments,which could draw on policy implications about overcoming the obstacles of inter-regional capital flows and promoting the development of emerging industries.Firstly,this study constructs theoretical model to analyze the impact of inter city transportation network on venture capital flow and the performance of invested enterprises,and further analyze the economic effect of venture capital on urban industrial development.Secondly,based on transportation data and venture capital event data,this study constructs high-dimensional fixed effect model,difference-in-difference model and instrumental variable model to identify the impact of transportation network on venture capital flow.Thirdly,based on the patent data of invested enterprises and the listing data of invested enterprises,this study specify the economic effect of transportation network on the innovation performance and growth performance of invested enterprises.Finally,this study uses the firm registration data to build a product space model,and analyze the impact of transportation network and venture capital on urban industrial development.The main empirical findings of this study are as follows:(1)Reducing the commuting time between cities by 1% will increase the total amount of venture capital between cities by 8600 yuan.Heterogeneous analysis shows that the emerging industries,early enterprises,small enterprises and individual investment benefit more from the expansion of transportation network;(2)Reducing the commuting time between cities by 1% will lead to 0.115% increase in the number of patents of invested enterprises,but has no significant impact on the innovation quality of invested enterprises.In addition,the expansion of inter-city transportation network can promote the successful acquisition and listing of invested enterprises.(3)Increasing the total amount of venture capital in urban industries by 1% will increase the probability of urban industries with revealed comparative advantage by 0.11%,and transportation network enhance venture capital’s effects through regional spillover effect and direct cross-regional investments.Based on the empirical findings,this study provides several policy implications for overcoming the obstacles of capital flows and promoting the development of emerging industries:(1)Promote the regional coordinative development based on intercity transportation network,thus increase capital mobility and the integration of capital market.(2)Promote the monitoring effect of venture capital in cross regional venture capital investment,thus improve the innovation performance and growth performance of investee firms.(3)Promote urban industrial development through venture capital investments and transportation network,and promote the transformation and upgrading of industrial structure. |
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