Research On Enterprise Innovation Ability Supported By Venture Capital

Innovation is an important factor for China's economy to achieve rapid growth since the reform and opening up,and it is also the key to adapting to the "new normal".Its uncertainty and high-risk characteristics are consistent with the high-risk and high-yield project demands of venture capital.As the most active group of innovation in China,SMEs are the main investment targets of risk institutions.The State Council issued the "Opinions on Promoting Certain Policies and Measures for Mass Entrepreneurship and Innovation" to increase support for entrepreneurial innovation and formulate incentive policies for venture capital investment in innovative activities.Therefore,studying the innovation ability of enterprises supported by venture capital to promote China's innovation-driven development strategy has practical significance.The study of the relationship between venture capital and enterprise innovation capability and its influence mechanism from the enterprise level has become a hot issue in international scholars in recent years.Due to the short period of study,the theoretical differences between the various academics are large,and the contradiction between the empirical conclusions is also huge.In China,due to the late start of venture capital,the difficulty in obtaining sample data and the backwardness of research methods,the research on this issue is still not deep.The deep research on the enterprise innovation ability supported by venture capital has a theoretical value for perfecting the theory of developing venture capital and enterprise innovation ability and promoting the integration of two research fields.This paper mainly studies the non-linear relationship of venture innovation supported by venture capital from the perspective of the number of patents granted.First of all,this paper reviews the relevant research of scholars at home and abroad and defines related concepts.And then systematically expounds the mechanism of venture investment on the innovation ability of enterprises from four aspects:screening ability,financing support,value-added service and exploitation behavior.And then the hypothesis that there may be a nonlinear relationship between venture capital and enterprise innovation capability is proposed.Finally,in order to verify this hypothesis,this paper based on the mixed cross-section data of 729 enterprises in the Shenzhen SME Board from 2004 to 2017,using the threshold regression model to conduct empirical research,making up for the lack of linearity in previous studies.the paper draws the following conclusions: There is a non-linear relationship between venture capital and enterprise innovation capability,and there is a threshold effect,that is,the impact of venture capital on the innovation ability of enterprises presents increasing and then decreasing.When controlling the size of the enterprise,capital structure,profitability,concentration of ownership and growth ability,if the number of authorized patents is lower than the threshold,venture capital promotes the innovation ability of enterprises;but if the number of authorized patents exceeds the threshold,venture capital inhibits the improvement of the company's ability to innovate.The empirical results of the number of valid invention patents also demonstrate this.The empirical results show that the exact role of venture capital in the innovation ability of enterprises is sometimes misunderstood,and venture capital has two-way influence on the innovation ability of enterprises.In the early stage,venture capital institutions first screened companies with promising prospects,then injected large amounts of funds into enterprises to carry out innovative projects,and provided multi-faceted value-added services such as market and finance in the process of enterprise innovation to comprehensively enhance their innovation capabilities.However,the continuous improvement of the innovation capability of enterprises is not the goal of venture capital institutions.In the later stage,venture capital will reduce the innovation ability of enterprises from the following ways:First,exploiting the information advantage to exploit the innovation resources of small and medium-sized enterprises through operation and financial tunnels;thesecond is to use the privilege of contract to intervene in enterprise management to reduce the efficiency of enterprise innovation;The third is to consume the existing innovation output of the enterprise,quickly commercialize it,and diversify the energy of further innovation of the enterprise;Effectively invade the innovative ideas of the founders of SMEs that accept investment and continue to develop profit;fifth is due to knowledge structure and risk control,venture capital is not willing to invest in the enterprise's advanced innovation;Sixth,because the addition of venture capital led other companies in the industry to apply for patents in a bad way,worsening the average level of innovation in the industry.Finally,based on the above research conclusions,this paper proposes policy recommendations for cultivating corporate innovation capabilities.For example,the establishment of a sound legal and regulatory system,strengthen government support for innovation,explore venture capital and corporate funding sources,focus on the balances of venture capital and corporate,and build a reputational mechanism for venture capital.In addition,at the end of the paper,the possible innovations and shortcomings of this research are pointed out,which is convenient for further research.