The Screening Effects And Value-adding Effects Of Government-sponsored And Private-sponsored Venture Capital

In the past 30 years,venture capital(VC)in China developed rapidly.Many domestic literatures have discussed the preferences of VC when they are choosing enterprises to invest,but there are few literatures discussed the "screening effects" and "value-adding effects" of venture capital concretely.Based on the panel data of the SMEB(Small and Medium-sized Enterprise Board)and the GEM(Growth Enterprise Market)between 2004 and 2015 in China,we explore the difference of the financial performance,growth and R&D of the companies that invested by government-backed venture capital(GVC)or private venture capital(PVC)in the IPO exits,and then we explore the formation of this difference is due to the "screening effects" or "value-adding effects".We can't find the evidence that GVC-backed firms or PVC-backed firms outperform their non-VC-backed firms in the exit.We just find the asset turnover ratio and R&D of GVC-backed firms is significantly lower than their non-VC backed counterparts.In the analysis of the screening effects,we find that contrary to the non-VC-backed firms,the ROE,ROS and sales growth of PVC-backed firms is higher,and contrary to the non-VC-backed firms,the R&D of GVC is lower.In the part of value-adding effects analysis,we find only PVC but not GVC can significantly improve the level of asset turnover ratio and R&D.At the same time,we find that the sales growth of firms decreased after PVC invest in.In a word,our research does not support the existence of screening effect or value-adding effect of GVC,but we found the evidence of screening effect and value-adding effect of PVC.