Research On Private Equity Fund To Support Independent Innovation In China

Research on Private equity fund (hereafter referred to as PE) to support independent innovation in China is one of the frontier issues to be solved in PE area. The key for innovation is the formation of the system and mechanism compatible with independent innovation. Due to its role in promoting innovations into market and high-tech industries, PE plays an increasingly important role and has become an important part in the financial support system for enterprise innovation. As the successful experience of the United States and many other developed countries, PE have been proved to be extremely useful institutional arrangements to encourage enterprises for innovation. With the rapid development of China’s private equity investment market in recent years, PE will become the new financial platform beneficial to the growth of innovation-oriented enterprises and the upgrading of industrial structure. Therefore, study of PE to support independent innovation in china not only has theoretical significance in exploring the effective combination of capital operation and independent innovation in financial area, but also has great practical reference value in the implementation of the development strategy as "Enhance China’s capacity for independent innovation and make China an innovative country".The article has interpreted deeply the mechanism of how PE promote the independent innovation, summarized the international experience of PE to support scientific and technological innovation, explored the current situation of China’s PE to support independent innovation, revealed the restrictive factors of China’s PE to support independent innovation, made an empirical analysis between China’s PE support and independent innovation, and put forward some countermeasures and suggestions about optimizing PE to support independent innovation in China. The rest of the paper is structured as follows.Part1:the mechanism of PE to support independent innovation, Including the capital formation mechanism, the risk diversification mechanism, the information revelation mechanism, the incentive and restraint mechanism. Part2:describes the development experience in the United States, Japan and Israel, especially the experience about how to make the mechanism work well.Part3:uses statistical interpretation method and normative analysis respectively, describes the current situation and reveals restrictive factors of PE to support independent innovation, which provides guidance that how China’s PE supports independent innovation.Part4:by use of Granger causality test and quantitative regression analysis method, the part sets up empirical model in order to measure the relationship between China’s PE and independent innovation.Part5:presents some suggestions about optimizing China’s PE to support independent innovation.