VC/PE’s Impact On Corporates’ Innovation Input

With the36years development, Chinese enterprises have had a great breakthrough both in innovation input and output, when VC/PEs have made a great contribution. Acting as a new way of financing, VC/PEs have supported a number of enterprises during past decade. China’s process made in innovation has been widely seen over the past decade, nearly80%of China’s Chinext listed companies have VC/PEs background before going public. It is widely acknowledged that not only the capital brought by VC/PEs is important to those enterprises, but also the experienced management knowledge, social resources and market information which have added great value to them. However, disagreement still exists in whether VC/PEs can help develop enterprises’ innovation input. In this article, the author uses China’s ChiNext market as research objects and selected181effective samples among406listed companies, while303of them are supported by either VC or PE. And the R&D strength (R&D expense/sales*100%) is used as an indicator of enterprises’innovation input. With emperical analysis and theoretical deduction on the topic of whether VC/PEs could breed innovation, whether foreign VC/PEs are doing better than local ones, whether investment strategy would affect enterprises’innovation and so on, this article comes to the conclusions as following:compared with non VC/PE-backed enterprises, those with support of VC/PEs demonstrate a much higher level of innovative input; among all the VC/PE-backed objects, foreign background VC/PEs have a higher impulse on enterprises’innovation, as well as the duration of VC/PEs’ holding time’s influence; the more investment enperiences VC/PEs have had, the better they could do in boosting enterprises’innovation; besides, both the VC/PEs’ stock share holding ratio and investment strategy shows no significant impact on enterprises’innovative input, while the influence still comes negative. Based on the facts that VC/PE really could bring added value in innovation aspects, the author makes several suggestions on the further development of VC/PE industry and enterprises’way out through innovation.