Foreign Venture Capitalists and the Internationalization of Entrepreneurial Companies: Evidence from China

Journal of International Business Studies, Vol. 44, No. 6, pp. 607-621, DOI: 10.1057/jibs.2013.22

UNSW Australian School of Business Research Paper No. 2012 BFIN 11

28 Pages Posted: 27 Jun 2012 Last revised: 10 Jul 2013

See all articles by Mark Humphery-Jenner

Mark Humphery-Jenner

UNSW Business School; Financial Research Network (FIRN)

Jo-Ann Suchard

UNSW Business School; Financial Research Network (FIRN)

Date Written: 2013

Abstract

We use a comprehensive database of venture-capital-backed companies from China to test whether and how foreign venture capitalists (VCs) can facilitate international initial public offerings (IPOs) of entrepreneurial companies. Foreign VCs increase the likelihood that a portfolio company lists on a foreign exchange and uses a top lawyer, banker, or accountant when doing so. The propensity to list overseas is moderated by the number of venture backers, the fund’s size, and governance in the domestic market. Foreign VCs encourage foreign-listings in domestic-backed companies. We take steps to address sample selection and endogeneity concerns. Overall, we show that foreign VCs encourage internationalization in entrepreneurial companies.

Keywords: venture capital, private equity, China, cross-border investment, internationalization, IPOs

JEL Classification: F36, G24, G34

Suggested Citation

Humphery-Jenner, Mark and Suchard, Jo-Ann, Foreign Venture Capitalists and the Internationalization of Entrepreneurial Companies: Evidence from China (2013). Journal of International Business Studies, Vol. 44, No. 6, pp. 607-621, DOI: 10.1057/jibs.2013.22, UNSW Australian School of Business Research Paper No. 2012 BFIN 11, Available at SSRN: https://ssrn.com/abstract=2092474 or http://dx.doi.org/10.2139/ssrn.2092474

Mark Humphery-Jenner (Contact Author)

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Jo-Ann Suchard

UNSW Business School ( email )

high street
High St
sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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