The Influence Of Venture Capital On Enterprise Performance

In this article we investigated the long-run performance of297firms after IPO which listed in small and medium sized enterprises market and growth enterprises market of Shenzhen Stock Exchange from2006to2009. The result is that all firms’operating performance was lower, but VC-backed firms were better than non-VC-backed firms, which supports VC monitoring hypothesis, denies VC moral hazard hypothesis.Since the investment of venture capital is not random, the endogeneity problem emerges. We could reverse the causal inference:the difference of operating performance is caused by the selection of venture capital. The propensity score method is used in this article. Empirical analysis show that the endogeneity problem affect the size and significance level of regression coefficients exactly. So this problem cannot be neglected.