The Research Of Influence From Private Equity Investment Funds On The Enterprise Performance Of The Invested Companies

Private equity investment funds are definitely imported goods which were created by the US initially from the 1930 s to 1940 s.Broadly speaking,the private equity investment funds include the angel investment,the venture capital,the private equity and so on.With the background that China saw a rapid development of the private equity investment funds in recent years,this paper is devoted to make a research of the influence from private equity investment funds on the enterprise performance of the invested companies.Meanwhile,this article also brings the concept of company life cycle into the research so that makes it possible to illuminate the mechanism of the influence from private equity investment funds on the enterprise performance of the invested companies belonging to different life cycles.Which brings out insights and suggestions both to the private equity investment funds and companies with funding needs.Specifically,the paper poses two hypothesizes after making abundant research of relative theories.H1: the growth performance of companies invested by private equity is better than those not;H2: the influence from private equity investment funds on the enterprise performance of the invested companies changes by the life cycle.In the following empirical research,takes all the companies who successfully made IPO on A share markets of China from 2014 to 2016 as research objects.Initially the effective samples are divided into two groups by the principle that whether a company have got invested by PE/VC and compared and analyzed.Then,the samples who get invested by PE/VC are divided into three groups by life cycles and a model is built with taking the number of the private equity investment funds,totally shares held,holding time and reputation as independent variables,with taking ROE and ROA as dependent variables separately as well as taking asset-liability ratio and company size as control variables.So that mechanism of the influence from private equity investment funds on the enterprise performance of the invested companies belonging to different life cycles can be figured out.This article comes with the following conclusion:(1)the enterprise performance of invested companies is distinctly less than companies not invested.(2)the fame and number of private equity may benefit the enterprise performance of invested companies.(3)the influence from private equity investment funds on the enterprise performance of the invested companies changes by the life cycle.Therefore,this paper makes some suggestions that: the companies with funding needs should carefully choose investment institutions and lay more attention to those with high fame degree,and number of money needed being fixed they should try to get more investment institution instead of only single one.