Crowding-in in Venture Capital in China

67 Pages Posted: 30 Jul 2018 Last revised: 15 Aug 2022

See all articles by Celine Yue Fei

Celine Yue Fei

University of North Carolina (UNC) at Chapel Hill - Frank Hawkins Kenan Institute of Private Enterprise

Date Written: July 29, 2018

Abstract

By exploiting a unique policy experiment in China and difference-in-differences methodology, I find that government investments crowd in private investments, with a multiplier of 0.88-0.93. The impact is most pronounced in less developed regions and in the earlier stage of developing the VC sector. Using administrative data, I provide micro-level evidence of the crowding-in effects transmitting in a diminishing pattern through network linkages among limited partners and VC firms, indicating that government investments have a signaling role on private investors.

Keywords: government programs, venture capital, quasi-experiment, crowding-in, social finance, network analysis.

JEL Classification: G24; G28; H76; O38

Suggested Citation

Fei, Celine Yue, Crowding-in in Venture Capital in China (July 29, 2018). Available at SSRN: https://ssrn.com/abstract=3221997 or http://dx.doi.org/10.2139/ssrn.3221997

Celine Yue Fei (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Frank Hawkins Kenan Institute of Private Enterprise ( email )

Campus Box 3440, The Kenan Center
Chapel Hill, NC 27599-344
United States

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