scholarly journals Modeling the Impacts of Venture Capital Investment on Firm Innovation

2021 ◽  
Vol 2021 ◽  
pp. 1-10
Author(s):  
Han Qiao ◽  
Sen Zhang ◽  
Yao Xiao
Keyword(s):  
Venture Capital ◽  
Capital Market ◽  
Capital Investment ◽  
Inhibitory Effect ◽  
Firm Innovation ◽  
Venture Capital Investment ◽  
Chinese Firm ◽  
Innovation Activities ◽  
Growth Enterprise Market ◽  
The Impact

Taking firms listed on the Chinese Growth Enterprise Market (GEM) in 2008–2017 as the sample, this study investigates the impact of venture capital (VC) investment on Chinese firm innovation using propensity score matching and a difference-in-differences (PSM-DID) model. The results show that, overall, firms’ innovation inputs and outputs do not show obvious enhancement due to VC entry, but instead show a strong and then weak inhibitory effect. VCs have heterogeneous impacts on firm innovation; that is, compared to other types of firms, firms with technology-dependent characteristics and firms whose actual controllers are experts in the same industry can effectively mitigate the adverse impact of VC on innovation inputs and gradually promote growth in the quantity and quality of the innovation outputs after the second year of VC entry. This study not only reveals the impact of VC on firm innovation activities in the Chinese capital market but also provides empirical evidence to help improve the financial innovation service system and the use of the capital market to promote innovation in China.

Stage financing and syndication in the IPO underpricing of venture-backed firms: Venture capital and IPO underpricing

2019 ◽  
Vol 20 (4) ◽  
pp. 289-300 ◽  
Author(s):  
Awounou-N’dri Honorine ◽  
Dubocage Emmanuelle
Keyword(s):  
Venture Capital ◽  
Information Asymmetry ◽  
Initial Public Offerings ◽  
Capital Investment ◽  
Ipo Underpricing ◽  
Data Set ◽  
Public Offerings ◽  
Venture Capital Investment ◽  
Ipo Performance ◽  
The Impact

The article investigates the impact of stage financing and syndication practices on the underpricing level of venture-backed firms (VBFs) undertaking their initial public offerings (IPOs). This empirical study uses a unique hand-collected data set concerning more than 260 VBFs that went public on Euronext Paris and Alternext between 1997 and 2013. Our findings suggest a lower level of underpricing for firms backed by syndicated venture capital investment. Additionally, we find that the syndicate size is negatively associated with the level of underpricing. However, there is no evidence that stage financing has a significant impact. Syndication thus appears to be the only relevant mechanism to improve IPO performance (measured by the underpricing level), as it reduces agency costs and information asymmetry between the different stakeholders in an IPO process.

scholarly journals The Role of Venture Capital Investment in Startups’ Sustainable Growth and Performance: Focusing on Absorptive Capacity and Venture Capitalists’ Reputation

2020 ◽  
Vol 12 (8) ◽  
pp. 3447 ◽  
Author(s):  
Jihye Jeong ◽  
Juhee Kim ◽  
Hanei Son ◽  
Dae-il Nam
Keyword(s):  
Venture Capital ◽  
Absorptive Capacity ◽  
Capital Investment ◽  
Sustainable Growth ◽  
Venture Capital Investment ◽  
Initial Stage ◽  
The Rich ◽  
And Performance ◽  
Startup Performance ◽  
The Impact

This study provides evidence on how venture capital (VC) investment affects startup firms’ sustainable growth and performance. Despite the rich and abundant research on the relationship between VC investment and startup performance, there is no clear evidence about the contribution of VC investment on the performance and market value of invested firms. In order to accurately measure the impact of VC investment, this study explored how VC investment at each stage of growth affects a startup’s sustainable growth and performance. Based on signaling theory and information asymmetry, this study proposed a positive link between initial-stage VC investment and a startup’s growth and performance. Using a sample of 363 firms listed from 2000 to 2007, this study demonstrated that startups are sustained and perform better as they receive their VC investment at the initial stage. The level of potential absorptive capacity positively moderated this association, unlike realized absorptive capacity, which did not show significant moderating effects.

scholarly journals Impact of Venture Capital Investment Syndication on Enterprise Lifecycle and Success

2016 ◽  
Vol 8 (5) ◽  
pp. 75 ◽  
Author(s):  
Asif Siddiqui ◽  
Dora Marinova ◽  
Amzad Hossain
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Survival Duration ◽  
Venture Capitalists ◽  
Venture Capital Investment ◽  
Investment Theory ◽  
Capital Financing ◽  
History Of ◽  
Investment Growth ◽  
The Impact

The article investigates the impact of venture capital investment and investment syndication on enterprise lifecycle and success using the exit history of venture capital backed companies in Australia. It is observed that the venture capital backed companies tend to outperform those which are not while companies receiving syndicated venture capital investment tend to outperform the other venture capital backed companies. Based on the classic venture capital investment theory, we argue that venture capitalists essentially engage in superior venture selection through pre-investment screening and contribute to entrepreneurial development through post-investment monitoring and value creation. We then empirically investigate the lifecycle of the Australian venture capital backed companies from company formation to first venture capital financing round to exit. Survival duration of the ventures, investment growth and exit status are specifically analysed to capture the lifecycle. The findings show that the survival duration prior and post venture capital investment, venture capital investment growth in successive rounds and investment syndication increase the probably of success for the ventures.

scholarly journals Trends in innovation and investment development of high-tech enterprises

2019 ◽  
Vol 7 (5) ◽  
pp. 79-92 ◽  
Author(s):  
I. A. Mandych ◽  
A. V. Bykova
Keyword(s):  
Venture Capital ◽  
Capital Market ◽  
Capital Investment ◽  
Growth Promotion ◽  
International Market ◽  
High Tech ◽  
Venture Capital Investment ◽  
Success Stories ◽  
Venture Investment ◽  
Market State

The article deals with the main prospects and problems of investing in innovative activities of high-tech enterprises. The principles of construction of venture investment and the mechanism of venture financing of a project when creating technological innovation were investigated. The overview of the Russian venture capital market shows the positive dynamics associated with the termination of a significant outflow of funds from the market and the growth in the number of newly created funds. There were also revealed promising areas for the development of the venture capital market and support high-tech enterprises, namely: success stories; low profitability of traditional investment instruments; the growth of activity of state corporations; growth in the number of startups focused on the international market; state support; angel investing growth; promotion of VC and innovations; the emergence of smart industries. Such barriers to the development of venture capital investment as the disunity of the market, the lack of co-investment. There were made conclusions about the prospects of engaging businesses in the processes of research and development of new products, as well as its promotion in promising markets among partners with special competencies, and that human resources are becoming the most important component of the success of high-tech industries.

scholarly journals Prospects for the Development of IT-clusters in Ukraine on the Basis of Venture Financing

2019 ◽  
pp. 190-195
Author(s):  
V. Mishura ◽  
V. Volodchenko
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Information Technologies ◽  
State Regulation ◽  
Cluster Policy ◽  
Innovation Ecosystem ◽  
Venture Capital Investment ◽  
Venture Investment ◽  
Venture Financing ◽  
The Impact

The basic principles of the development of IT clusters as a component of the national innovation ecosystem of the country were reviewed and analyzed. A conceptual model of organizational and economic state regulation of IT clusters in the national economy has been developed, which harmonizes the social and economic interests of the participants of the cluster association and is aimed at forming a state cluster policy based on improving the competitiveness of the IT sector. Practical recommendations for improving the state policy of development of IT-clusters in Ukraine on the basis of venture capital investment are substantiated. It has been established that despite the positive dynamics of venture investment in the IT sector in recent years, unfortunately, it is still in the process of becoming. The intensity of the impact of venture capital on the formation and development of the IT sector in Ukraine is estimated. The main factors that impair the development opportunities of this type of investment in Ukraine are investigated. Analyzed the structural and regional features of the development of IT-clusters. Based on the analysis, it was revealed that the development of IT clusters on the basis of venture investment is a promising and modern investment direction for Ukrainian enterprises. Keywords information technologies, IT cluster, IT sector, venture financing; innovation development, venture capital.

scholarly journals The impact of foreign direct investment and venture capital investment on entrepreneurship in the Republic of Serbia

2019 ◽  
Vol 8 ◽  
pp. 67-86
Author(s):  
Ivana Jolović ◽  
Alpar Lošonc
Keyword(s):  
Foreign Direct Investment ◽  
Venture Capital ◽  
Financial Stability ◽  
Direct Investment ◽  
Capital Investment ◽  
Venture Capital Investment ◽  
Starting Point ◽  
The Republic ◽  
The Impact ◽  
Venture Capital Investments

The subject of the research is the examination of features and significance of two modern types of investment intended for financing entrepreneurship: that is, foreign direct investment and venture capital investment. The starting point of the study is the sector of small and medium-sized enterprises and entrepreneurs with all the challenges and opportunities that characterize its financial position in the Republic of Serbia. The aim of this research is to analyse the impact of both direct investment and entrepreneurial capital investment on small businesses, or more precisely, to examine the influence of foreign direct investment and venture capital investment on entrepreneurship. This paper focuses on the impact that these types of financing have on management, financial stability, and the performance of the relevant business entities. Furthermore, the current situation and perspectives of these types of financing are analysed in detail. The aim of this paper is to provide insight into the effects that foreign direct and venture capital investments have on Serbian small and medium-sized enterprises and the entrepreneurial sector, as well as to point to what is currently the more favourable solution for the financing problem with which these entities are faced. The following methods are used for the preparation of this paper: a detailed analysis of the content of European and national statistical reports; available national and foreign literature of international and domestic authors in the field of foreign direct investment, venture capital investment and entrepreneurship; descriptive and comparative methods.

Assessing venture capital industry growth in Korea

2018 ◽  
Vol 44 (1) ◽  
pp. 74-85 ◽  
Author(s):  
Hae Jin Chung ◽  
Moon Young Kang
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Bass Model ◽  
Industry Growth ◽  
Content Type ◽  
Government Interventions ◽  
Venture Capital Investment ◽  
The Us ◽  
The Usa ◽  
The Impact

Purpose The purpose of this paper is to investigate how the venture capital industry evolves in Korea. The paper also compares the venture capital industry growth of Korea with that of the USA. Design/methodology/approach This paper forecasts the growth of the Korean venture capital industry using the Bass Model. The authors apply the Bass Model to both Korean and US data to compare the model estimates of Korean and US data, and to make use of the US case by taking the “guess by similarity” approach to analyze Korean venture capital industry growth. Findings The authors find that the innovative fund inflows in Korea are stronger than those in the USA, while inertial reinvestments are weak. The study forecasts that new investments in Korea grow at a 5-7 percent rate each year for the next five years, and the growth rate slows down over time. Peak investment is predicted around the year 2030. Practical implications Based on the forecasted venture capital investment schedule each year, this study derives the fundraising schedule and the implications for Korea fund-of-funds management to match the investment schedule. Originality/value The model estimates provide a guideline for forecasting venture capital industry development in countries with brief histories of venture capital, which lack data. The analysis can also be applied to cases when developing countries and emerging financial markets assess the impact of government interventions on venture capital industry growth, especially when they provide fund-of-funds.

scholarly journals Venture capital investment cycles: The impact of public markets

2008 ◽  
Vol 87 (1) ◽  
pp. 1-23 ◽  
Author(s):  
Paul Gompers ◽  
Anna Kovner ◽  
Josh Lerner ◽  
David Scharfstein
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Public Markets ◽  
Venture Capital Investment ◽  
The Impact

scholarly journals Venture Capital Investment Cycles: The Impact of Public Markets

2005 ◽  
Author(s):  
Paul Gompers ◽  
Anna Kovner ◽  
Josh Lerner ◽  
David Scharfstein
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Public Markets ◽  
Venture Capital Investment ◽  
The Impact
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