| In recent years, private equity investment in China’s capital markets continues togrow, both the number and the amount of investment have increased rapidly. Privateequity investment can promote the growth and independent research and developmentof high-tech industries, help enterprises which has been invested to solve the fundinggap, improve the management structure and business model. Besides, private equityinvestment can improve the regional scientific and technological level and promotelocal economic growth. In view of this, key cities like Beijing, Shanghai and Tianjinhave issued a series of preferential policies aimed at attracting private equity investmentinstitutions to be settled, protecting the interests of private equity investors andpromoting the development of the local private equity investment. In this context, thispaper empirically analyzes the effect of regional economic growth and localgovernment incentives on private equity investment based on the theoretical analysis ofthe mechanism of regional economic growth and local government incentives on privateequity investment and taking China’s private equity investment as the research object.This paper sorts systematically the related literatures about private equity investmenthome and abroad and illuminates implications for the development of China’s privateequity investment based on the analysis of the development process of typical foreigncountries’ private equity investment. This paper gives a comprehensive elaboration onthe mechanism of regional economic growth and local government incentives on privateequity investment and thus deducts six hypotheses. Then, this paper empirically tests thesix hypotheses based on China’s provincial panel data from2003to2011. Finally, onthe basis of the theoretical and empirical analysis results, it puts forwardrecommendations to promote the healthy and rapid development of China’s privateequity investment. |
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