Venture Capital in China: A Culture Shock for Western Investors

Management Decision, Vol. 45, pp. 708-731, 2007

Posted: 16 Jan 2009

See all articles by Thomas John Walker

Thomas John Walker

Concordia University, Quebec - Department of Finance

Kuntara Pukthuanthong

University of Missouri, Columbia

Date Written: January 13, 2009

Abstract

Getting an early foot in the door of a young start-up firm through venture capital investments has on average been a risky, but a highly profitable investment strategy. The possibility to reap similarly large profits in a country that leads the world in new business establishments, whose people are driven by a highly entrepreneurial spirit, and whose government continues to open its markets, makes China particularly interesting for venture capital investors. Our study examines peculiarities of the venture capital market in China and compares it to Western markets. We argue that different cultural norms, corporate governance structures, a lack of appropriate exit strategies, and governmental intervention are important factors that set the markets apart and should be taken into consideration when making venture capital investments in China.

Keywords: Venture capital, Economic policy, Entrepreneurialism, China

Suggested Citation

Walker, Thomas John and Pukthuanthong, Kuntara, Venture Capital in China: A Culture Shock for Western Investors (January 13, 2009). Management Decision, Vol. 45, pp. 708-731, 2007, Available at SSRN: https://ssrn.com/abstract=1326773

Thomas John Walker

Concordia University, Quebec - Department of Finance ( email )

Montreal, Quebec H3G 1M8
Canada

Kuntara Pukthuanthong (Contact Author)

University of Missouri, Columbia ( email )

Robert J. Trulaske, Sr. College of Business
403 Cornell Hall
Columbia, MO 65211
United States
6198076124 (Phone)

HOME PAGE: https://www.kuntara.net/

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