Venture Capital Performance in China
51 Pages Posted: 21 Nov 2013
Date Written: November 20, 2013
Abstract
This study investigates the determinants of venture capital (VC) performance in China. We focus on the impact of VC reputation, political connections, and managing partner/founder’s experience on the performance of domestic and foreign VC investments. After controlling for VC age, portfolio firm age, syndicate size, VC industry competition, and a number of other factors, we find little correlation between VC reputation and investment performance in the Chinese market. In contrast, we find that the institutional characteristics such as political connections of VC firms and managing partner/founder’s prior experience as managers and investment bankers are crucial to domestic VC success, but these have little impact on foreign VC performance. In particular, if a domestic VC firm is politically connected, or a managing partner/founder has more management experience or has previously worked as an investment banker, a portfolio firm is more likely to have an IPO exit through the Chinese mainland stock markets, and these VCs are also likely to speed up a portfolio firm’s exit through IPOs in China.
Keywords: Venture Capital, Performance, Emerging Market, China
JEL Classification: G24, G28
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Why Has IPO Underpricing Changed Over Time?
By Tim Loughran and Jay R. Ritter
-
Why Has IPO Underpricing Changed Over Time?
By Tim Loughran and Jay R. Ritter
-
A Review of IPO Activity, Pricing and Allocations
By Jay R. Ritter and Ivo Welch
-
A Review of IPO Activity, Pricing, and Allocations
By Ivo Welch and Jay R. Ritter
-
Why Don't Issuers Get Upset About Leaving Money on the Table in Ipos?
By Tim Loughran and Jay R. Ritter
-
Underpricing and Entrepreneurial Wealth Losses in Ipos: Theory and Evidence
-
Common Stock Offerings Across the Business Cycle: Theory and Evidence
By Hyuk Choe, Ronald W. Masulis, ...
-
IPO Market Cycles: Bubbles or Sequential Learning?
By Michelle Lowry and G. William Schwert
-
IPO Market Cycles: Bubbles or Sequential Learning?
By Michelle Lowry and G. William Schwert