Can Individual Venture Capital Promote Regional Technological Innovation? -- Empirical Test Based on Chinese Provincial Data in 2016

Innovation is the driving force of social and economic development, and a decisive factor in enhancing national competitiveness. In recent years, more and more countries have taken innovation to a strategic height. Chinese institutional investors have an increasing share of the overall ownership and make a remarkable improvement in the market position. Based on an increasingly significant role in the capital market, they actively intervene in the management of the enterprise, focusing on long-term improvement of corporate performance. Correspondingly, Institutional investors can also affect the level of technological innovation by participating in corporate governance. This study analyzes the mechanism of institutional investment affecting the technological innovation of enterprises, and takes an empirical test of institutional investors on the impact of technological innovation. The results show that the overall ownership of institutional investors has a significant positive impact on corporate R&D expenditure. This paper proposes that the future policies should still be oriented toward the development and support of institutional investors, and give further play to their efforts to promote technological innovation of enterprises.

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The Legal and Institutional Foundations of Silicon Valley’s Technological Innovation: An Interdisciplinary Literature Review

Kutafin Law Review ◽

10.17803/2313-5395.2021.3.17.472-484 ◽

2021 ◽

Vol 8 (3) ◽

pp. 472-484

Author(s):

S. D. Stone

Keyword(s):

Venture Capital ◽

Technological Innovation ◽

Initial Public Offering ◽

Silicon Valley ◽

Business Culture ◽

Venture Capitalists ◽

Board Of Director ◽

Institutional Relations ◽

Major Factors ◽

Public Offering

This article reviews interdisciplinary literature to explain how state legislation and the practice of law in California influenced the success of Silicon Valley in creating a startup business culture involving the commercialization of technologies built on venture capital finance. Scholarship has identified four major factors in the rise of Silicon Valley: business culture, symbiotic institutional relations with research universities, California contract and employment law, and Silicon Valley law firm culture. Both law and institutional support have been central to the commercialization of scientific knowledge that is the hallmark of Silicon Valley. Silicon Valley companies have remained leaders in technological innovation for over sixty years, encompassing various technologies from semiconductors to personal computers to the Internet. This entrepreneurial approach to technology continues to this day as exemplified by the successful DoorDash and Airbnb IPOs launched in 2020. The paradigmatic Silicon Valley technology company consists of a small group of entrepreneurs building a start-up technology company funded by a venture capital fund. The venture capitalists (VC) maintain hands-on management of the company and receive seats on the board of director and preferred stock rights. If the business plan is successful, the company offers shares to the public through an initial public offering (IPO), or arranges additional funding from another VC fund. This Silicon Valley model is characterized by a tolerance for failure and high labor mobility. Technology company employees have the freedom to leave established companies to start their own ventures.

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