Exploring CVC’s Impact On Technological Innovation Of Invested Companies

With the development of the economic globalization, the competition of companies becomes more diversified. More and more companies realize that relying on the technology of internal R&D department is not enough to remain competition for seeking the sustainable development and adapting to the external environment. They need to learn from the external agencies and absorb advanced technological experiences to implement innovation strategy.Corporate venture capital as a way of external innovation is getting more and more attention.The China Venture Capital Development Report shows that the capital from companies(including listed and unlisted companies) accounts for nearly half of the total venture capital of late years, and the influence of the professional financial institutions is gradually weakening. Corporate venture capital is becoming an important part of the venture investment in China.This paper analyzes the influence of CVC activities on the companies’ technological innovation. The listed companies on SME Board from 2007 to 2013 have been chosen and the data of 2014 of these companies have been used as samples in the research. In theory,previous researches and analyses always focus on the amount of the venture investment, but ignore the effects of the industry factors, regional factors and management factors on invested companies. This paper will fill the blank of this area in theory. In empirical aspect, this paper uses descriptive statistics analysis and multiple regression analysis to explore the factors that influence technological innovation. After that, this paper comparatively analyzes differences between the effects of CVC and IVC activities on the technological innovation.At the end of the empirical part,this paper uses the DEA model to make the robustness test.The main conclusions are as follows: CVC activities could significantly improve the invested companies’ technological innovation; the shareholding ratio of CVC investors in invested companies is positive to both input and output of invested companies’ technological innovation. But in IVC activities, the shareholding ratio can only promote the output of invested companies’ technological innovation; the industry correlation, regional correlation and management involvement between the two parts can positively promote both input and output of invested companies’ technological innovation. But seeing from the level of significance, CVC activities have more influence on the number of patents than R&D input,which illustrates that, CVC activities can promote the technological innovation output more than input. From the robustness test, this paper can also drew the same conclusions which make the results more convincing. Based on the results above, this paper proposes some constructive suggestion from the view of the invested, investing companies and government;and summarize shortcomings and look into the future study.