Financing new ventures in China: System antecedents and institutionalization

White, Steven; Gao, Jian; Zhang, Wei

doi:10.1016/j.respol.2005.04.002

Cited by 85 publications

(74 citation statements)

References 13 publications

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“…The impetus for the development of the Chinese venture capital industry was government policy; in China the government still has a dominant role in the economy. In 1984, the National Research Center of Science and Technology for Development suggested that China establish a venture capital system to promote high technology (White, Gao, & Zhang, 2005). Local governments in China encouraged and sometimes sponsored venture funds to invest in state owned enterprises to bring them up to a world standard for productivity and quality.…”

Section: Evolution Of Venture Capital In Chinamentioning

confidence: 99%

Venture capital in China: Past, present, and future

Ahlström

Bruton

Yeh

2007

Asia Pacific J Manage

196

113

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This article reviews the literature on venture capital in China and examines where China’s venture capital industry has been and where it is likely to go in the future. Since the 1980s, venture capital in China has grown steadily alongside the robust national economy. The future is likely to offer even greater opportunities, as entrepreneurs are encouraged and property rights improve. However, there will also be a period of transition as the market continues to mature and as new legal structures and commercial arrangements emerge. Venture capital in China has many interesting differences from that in Western countries. The venture capital industry is shaped by the institutional context and China is no exception to this. This article also examines some specific differences between the system in China and that of the United States. Future prospects for venture capital are also appraised as China continues its transition to a market economy. Copyright Springer Science+Business Media, LLC 2007China, Venture capital, Entrepreneurship, Emerging economies, Institutional theory, Transition economy,

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Section: Evolution Of Venture Capital In Chinamentioning

confidence: 99%

Venture capital in China: Past, present, and future

Ahlström

Bruton

Yeh

2007

Asia Pacific J Manage

196

113

View full text Add to dashboard Cite

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“…Venture capital, which is the primary financial vehicle to provide start-ups with sufficient capital, is rather new to China. Moreover, the initial impetus for venture capital provision came from the Chinese Government at national and particularly local levels, while private domestic and foreign firms were only allowed to enter the market since the late 1990s (White et al, 2005). The findings of Richard et al (2009) mirror the important role of local governments in new venture financing.…”

Section: Business Strategies In China's Health Biotech Sectormentioning

confidence: 99%

Anatomy of cluster development in China: the case of Health Biotech Clusters

Conlé

Taube²

2012

Journal of Science and Technology Policy in China

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des Rechteinhabers aufgrund einer (DFG geförderten) Allianz-bzw. Nationallizenz frei zugänglich. / This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively. EmpfohleneDesign/methodology/approach -The paper employs a demographic approach that is inspired by the 2006 work of Romanelli and Feldman on cluster development in the USA. It categorizes China's clusters based on differences in the degree of policy support and the nature of the science base. Then, it draws a sample of 75 of China's most visible firms and analyses them in terms of entrepreneurial origin, their location and, if applicable, the location of their subsidiaries. By matching types of firms with types of clusters, the paper highlights some characteristics of China's regional development. Findings -Studies on China's high-tech agglomerations unanimously complain about a lack of "creative buzz" compared to the vibrant clusters of for example, the Bay Area in the USA. The analysis indicates that the lack of a creative culture is associated with the anatomy of cluster development. China's clusters grow to a significant extent by attracting enterprise subsidiaries to their sites. The authors argue that these particular cluster anatomies are founded on China's capital market. As the capital market is not prepared to provide pre-revenue firms with sufficient funds, firms have to earn revenue quickly in order to ensure their viability. Therefore, they concentrate on building up manufacturing capacity and exploiting given technologies. The main point is that local governments as major providers of financial support are instrumental in this process. The establishment of manufacturing subsidiaries in various locations rests on the rationale of collecting funds. This leads to the conclusion that national capital markets either reinforce or inhibit clustering depending on how much it allows the mobility of financial capital. Local government funds do not travel far. This has an impact on the firms' localization decisions and their business strategies, which, in turn, affects the "culture" inside the clusters.Research limitations/implications -This argument is based on a limited number of interviews conducted by the authors or other researchers. In order to corroborate the link between the capital market and local development trajectories, more evidence needs to be collected via interview surveys and other means to extract financial information. Originality/value -Unlike other research on Chinese clusters, this paper offers an interregional perspective based on a demographic approach. The argument is original in linking regional cluster dynamics with the national institutional set-up.

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“…For instance, in 1984, the National Research Center of Science and Technology for Development advocated China to establish a venture capital system to promote high technology industries (White, Gao, & Zhang, 2005). This advocacy has led to the establishments of many Chinese VC firms which are sponsored by China's central and local governments, as well as and government controlled universities.…”

Section: Literature Reviewmentioning

confidence: 99%

Investigating the Motivations of VC Syndication in China --- Do Chinese Leading VC Firms Make a Difference in Terms of Syndication Decisions

Yue-jin

Wang

2016

IJEF

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The venture capital industry in China is quickly evolving and becoming more and more important in the development of small and medium-size companies in China. Venture capital firms usually invest in young private transactions which are usually involved with high risk. In addition, the legal and political environments in China are significantly different from those in the developed markets and at the same time, China is undergoing significant changes of business environments, which brings even more challenges to the VC firms in China's market. Under these challenges, syndication has become a very popular investment method for the VC companies to diversify their investment risks. In this paper, we explore the various factors that might influence the motivation of VC firm's syndication decisions in China's market and especially focus on the impact of the firm's Chinese ownership. We believe that VC firms' Chinese ownership has a significant influence on the firm's decision for syndication investment and our empirical analysis confirms this. We find that Chinese VC firms have a significantly lower likelihood to make syndicated investment than their foreign counterparties. We also explore the interactions between the firms' Chinese ownership and other influencing factors to investigate their joint impacts on the syndication likelihood. We believe our study will provide a better and thorough understanding about the VC firms' syndication behavior in China's market and thus will offer significant values to Chinese policy makers in terms of their efforts to promoting VC development in China.

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Financing new ventures in China: System antecedents and institutionalization

Cited by 85 publications

References 13 publications

Venture capital in China: Past, present, and future

Venture capital in China: Past, present, and future

Anatomy of cluster development in China: the case of Health Biotech Clusters

Investigating the Motivations of VC Syndication in China --- Do Chinese Leading VC Firms Make a Difference in Terms of Syndication Decisions

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