The Impact Of Venture Capital On Enterprise Technological Innovation

With the rapid development of science technology and rapid evolution of economic activity, all of the companies in the world are faced with the opportunities and challenges that brought by high-tech development.For China in fast development of21st century, facing the increased competition of international market, the development of the high-tech product and sustained growth of high-tech industries is vital.With the continuous development of the national socialism marketing, small and medium-sized enterprises (SMEs) in China have become a significant force in economic growth, job creation and technology innovation. However, due to its own specific characteristics, SMEs are difficult to obtain development funds through traditional financing channels. As a innovative financial tool and financial support system, venture capital focused in the high-tech development fields which contains high risk and high yielding, which just adapted to the specific situation of SMEs in technological innovation. In recent years, venture capital industry in China is developing rapidly, and thus to explore mechanism of venture capital for technological innovation and identify the impact of venture capital on technological innovation in China have an important significance.This paper firstly presents readers a summary of the theoretical explanations of venture capital on technological innovation as well as the empirical researches on this topic at home and abroad, and analyzes the impact factors of technological innovation and the correlation of venture capital with technological innovation, makes further explore of mechanism of venture capital on technological innovation,builds a theoretical model and proposes theoretical assumptions of this paper.Based on this theoretical model and assumptions, this paper then takes the listed companies in the SME board as a sample, through analyzing cross-sectional multiple linear regression model and negative binomial regression model, conducts an empirical research on the impact of venture capital on technology innovation. The results show that venture capital has a significant positive impact on enterprise technology innovation input and output, in which the role of venture capital on technology innovation output has a lagged effect. This impact from funds and management, on the one hand, venture capital provides financial support for R&D expenditure of enterprises to to improve the technological innovation input;the other hand, venture capitalists help the enterprise by providing management, operation and other aspects of experience to improve efficiency of enterprise technology innovation,and thus increase the output of technological innovation.The study also shows that the technical staff intensity and the profitability capacity have a positive impact on corporate technological innovation input; firm size, enterprise’s profitability development capacity, R&D expenditure have a positive impact on corporate technological innovation output; the role of corporate R&D expenditure on technological innovation is greater than venture capital. In addition, there are significant industry differences in technological innovation activities of enterprises, R&D expenditure and innovation outcomes of information technology industry are greater than manufacturing industry.Finally, the paper provides an analysis on the research outcome and proposes the policy suggestions for developing and improving venture capital industry, cultivating enterprises’own innovation ability and further improving China’s technological innovation system.