The Impact Of Venture Capital Control On Corporate Growth

Health and biomedicine are related to the national economy and people's livelihood,and are sunrise industries that the state focuses on and supports.Since the reform and opening up,the field of biomedicine has been the focus of social concern.In order to stimulate the growth of biopharmaceutical enterprises and improve the financing environment,HKEX announced the new listing rules for broadening the listing system in Hong Kong on April 24,2018.One major change for biotech companies is to allow initial public offerings of biotech companies that fail the main board's financial rating eligibility test.This system characteristic also has the embodiment in the science and innovation board listing system.The new regulations reduce the risk of venture capital investment in biotechnology enterprises to a certain extent and will change the internal logic of venture capital investment while encouraging venture capital investment.The relaxation of listing conditions of biopharmaceutical enterprises enhances their negotiation ability with venture capital,and venture capital tends to weaken the distribution of corporate control rights.How this change will affect the biopharmaceutical enterprises directly reflects the institutional effect of the new listing rules,which is a question worth paying attention to and discussing.Based on the above understanding,this paper focuses on the impact of venture capital control on the growth of biopharmaceutical enterprises.This paper takes all the biotechnology companies listed in Shanghai and Shenzhen a-share markets from 2005 to 2017 as the research object,and focuses on the effect of venture capital control on the growth performance of biopharmaceutical companies after initial public offering(IPO).The empirical study shows that venture capital control has an inhibitory effect on the growth of biopharmaceutical enterprises after IPO.In addition,the balance of control between venture capital and core technology owners of bio-pharmaceutical companies has a negative effect on the growth performance of bio-pharmaceutical companies after listing.The results show that,on the one hand,venture capital usually pursues short-term profits,and its control rights may interfere with the normal development planning and management and operation decisions of the invested biotechnology companies,which is not conducive to the long-term operation and growth of biotechnology enterprises.On the other hand,the conflict between venture capital control and core technology control further weakens the long-term growth of biopharmaceutical enterprises.In addition,by sorting out and analyzing the obtained data,this paper also finds that the state-owned non-venture capital with a long history and a larger scale is more inclined to obtain the control rights of biological companies.The research of this paper can provide reference for the evaluation of growth value of biopharmaceutical companies and the design of public financing system of biopharmaceutical companies.