The Impact Of Venture Capital On The Investment And R&D Investment

Since 1995,our country had put forward the strategy of rejuvenating the country through science and education,and had clearly defined the development of science and education as an important development strategy for economic development and the building of a modern and powerful country.Small and medium-sized enterprises have long been an important subject for China's economic development and scientific and technological progress,as well as the development of high-tech industrialization.However,due to the fact that the market economy is not yet perfect,small and medium-sized enterprises and start-up companies are often faced with difficulties in financing and expansion is heavily dependent on internal funds.In order to solve the problem of financing difficulties of small and medium-sized enterprises,in the 1990s our country began to vigorously promote the development of Venture Capital in our country's financial markets,and set up the gem in the shenzhen stock exchange,actively promoted the financing of small and medium-sized enterprises.This article focuses on the role of Venture Capital in GEM companies,and studies from the perspective of investment-cash flow sensitivity.This study takes the data of GEM companies from 2010 to 2015 as the sample,and divides the sample according to whether the top ten shareholders have Venture Capital institutions into Venture Capital background companies and non-Venture Capital background companies.By comparing the data of the two types of companies,the influence of Venture Capital on the sensitivity of the company's investment-cash flow sensitivity,R&D investment-cash flow sensitivity was studied.And the article studied the impact of R&D intensity on corporate performance with Venture Capital backgrounds.The empirical study shows that all samples of GEM companies face financing constraints,and face investment-cash flow sensitivity problem.Dueto the companywith background of Venture Capitalin high-speed expansion period,degree of financing constraints is significantly higher than the background of Venture Capital company,the addition of investment risks on the investment-cash flow sensitivity without significant regulatory role,background of Venture Capital companies are still facing serious investment-cash flow sensitivity problem.The GEM companies are widespread R&D financing constraints,the whole samples exist R&D investment-cash flow sensitivity.And Venture Capital has a R&D preference,empirical results show that Venture Capital can significantly alleviate the company's R&D investment-cash flow sensitivity issues,risk background R&D investment for the company's performance has lagged positive correlation.In summary,we can conclude that the financing constraints faced by GEM companies with Venture Capital background in the R&D investment can be effectively mitigated.However,for the development needs of Venture Capital background companies,the involvement of Venture Capital is actually drop in the bucket,and the GEM companies still need to broaden the financing channels.