The Influence Of Venture Capital On The Growth Of GEM Enterprises

Venture capital plays an important role in promoting technological innovation activities and Initial Public Offering(IPO)processes in startups.However,after the exit of venture capital,the technological innovation activities and growth of companies are affected to varying degrees,and this phenomenon is particularly prominent in the GEM.At present,the academic community's views on this impact are divided into two categories: “incentive effect” and “inhibition effect”.But these two types of views rarely fully consider the transfer of technological innovation and the different grading points of corporate growth.Therefore,this paper discusses the impact of venture capital on the growth of GEM companies from the perspective of technological innovation.Firstly,this paper selects 517 companies in the GEM from 2010 to 2017 as research samples,selects the index system from four dimensions to form a comprehensive index of enterprise growth through principal component analysis.Then establish a regression model to test the relationship among venture capital,technological innovation and corporate growth.This article specifically studies the following issues:(1)Can venture capital inhibit the negative relationship between financing constraints and corporate technology innovation investment,and how to identify the quality of innovation in the process of innovation input to innovation output?(2)The difference in the impact of risk investment participation,the number of joint investments,and the proportion of different venture capital institutions on the growth of the company,and is there a threshold for the difference in the role of these three venture capital scenarios for GEM companies under the quantile level of different enterprise growth?(3)Does technological innovation have a significant mediating effect in the process of corporate growth? Does marketization have different effects on the growth of companies with or without venture capital participation?Research indicates:(1)Venture capital can effectively alleviate the sensitivity of enterprises to cash flow,thereby increasing R&D investment;and venture capital canpromote the transformation of enterprise technology innovation into high-quality innovation output based on patents;(2)Within a certain scope,the participation of venture capital and the increase of shareholding ratio can stimulate the growth of GEM companies,and the increase in the number of joint investments will inhibit the growth of enterprises,and these two effects are particularly prominent in the company's operational capabilities and solvency;Venture capital has an inverted U-shaped relationship in the different quantile of the growth of the enterprise,and all of them have a critical point at the 75% quantile.When Q>75%,all three showed different degrees of downward trend,and this trend was the most significant among the shareholding ratios;Co-investment is still in a negative correlation when Q<75%,but with the increase of the quantile,this negative correlation has been alleviated and a positive effect occurs at the 75% threshold;(3)Technological innovation and marketization have played a significant positive intermediary and adjustment effect in the process of enterprise growth.Finally,this paper combines empirical conclusions and practical experience to make some personal recommendations for startups,governments and venture capital institutions.