Research On The Impact Of Venture Capital On Firm’s Performance

It is widely believed that venture capital is closely related to the improvement of business performance. Venture capitalists have advanced enterprise management experience are considered to have played a significant role in promoting business performance. This article has examined whether venture capital has a significant role in promoting business performance of the enterprise through empirical studies. This article also has a further test the impact on business performance of holdings by a state-owned background and a high reputation venture capital. Domestic research did not match sample when select the sample. This will make the selection of the sample may exist sample selection bias such as self-selection between firms and venture capitals. This article makes the listed companies in the SME board of the Chinese Shenzhen Stock Exchange as the research object, the theory of venture capital business performance as the theoretical basis, and has an empirical test of the differences in the business performance indicators of venture capital holdings listed by using the propensity scoring matching method (PSM) to eliminate the sample selection bias.The study found that whether a company can get the shareholding by venture capital have a significant relationship between their industry, the proportion of the number of employees of higher education and the total assets of the enterprises. Enterprises of technology-oriented industries and smaller assets can more easily get the holdings of venture capital institutions. Empirical results show that the certification and oversight role as well as non-capital value-added services of venture capital institutions makes business performance of enterprises with venture capital holdings significantly higher than those enterprises without venture shareholding. When distinguish the characteristics of venture capitals, the business performance of enterprises holding by state-owned background venture capitals superior to the control group enterprises in general. In addition, the state-owned background venture capital institutions can take advantage of its special relationship network to help the companies obtain additional debt financing from the state-owned banks, making their interest expense relatively high. On the other hand, the empirical results suggest that high-reputation venture shareholding did not give the enterprise higher business performance. The article believes that the reason is the test results are likely to be the impact of the small sample size of this study, and most venture capital in China is still relatively young, still vulnerably driven by "grandstanding" motivation. Finally, the article puts forward some policy recommendations on the development of venture capital in China based on the empirical results.