Signaling through government subsidy: Certification or endorsement

Yan, Zhou; Li, Yue

doi:10.1016/j.frl.2017.10.007

Cited by 54 publications

(35 citation statements)

References 15 publications

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“…The granting of subsidies in Dream Town is similar to other regional practice, not a matter of government policy but, rather, a result of decisions made by individual officials (Yan and Li 2018).…”

Section: Phase 1: Product Conceptualizationmentioning

confidence: 96%

“…The provision of both seed and venture capital to facilitate product knowledge and materialization is the role of a feeder, in which a person or organization supplies the required resources (Feld 2012;Baldock 2015;O'Connor et al 2018). This can help the entrepreneurial team to signal its project preponderance (Yan and Li 2018) and thus boost its access to external resources. Therefore, we offer the following proposition:…”

Section: Phase 2: Product Materializationmentioning

confidence: 99%

“…The DTSCO acts as an endorser, that is, a person or organization that is authorized to sign a negotiable security or can shape the opinions of others (de Lange 2016) and create a superior institutional framework to coordinate these kinds of collaboration, including credit-based finance, strong business associations (Casper and Whitley 2004), and being the shareholder. The DTSCO's industryguiding fund and promoting equity exchange for the new venture are "direct or recessive" government guarantees (Yan and Li 2018) and enhance a new venture's access to external financing, because the banks in China display pro-government behavior. Nevertheless, a local government's endorsement provides the participating actors with control and accountability for a new venture (Hodge and Adams 2016) and catalyzes "peer-based" interactions (Mason and Brown 2014).…”

Section: Phase 3: Product Commercializationmentioning

confidence: 99%

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Projectification and Partnering: An Amalgamated Approach for New Venture Creation in an Entrepreneurial Ecosystem

Liu

Fei-rong

Xia

et al. 2019

Emerging Markets Finance and Trade

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The creation of a new venture is at the heart of entrepreneurship. Chinese governments at different levels are proactive in promoting the entrepreneurial ecosystem (EE) and fostering new venture creation (NVC). However, it is still far from clear how governments as focal actors in the EE affect and regulate the process and pattern of NVC. This study borrows from the theory of temporary organization and conducts a comparative case study of two entrepreneurial projects in the Hangzhou Dream Town EE. This study proposes an integrated conceptual framework to illustrate NVC in two dimensions of projectification (the process of NVC) and partnering (a pattern of NVC) and specifies that the main role of local governments is as a sponsor, feeder, and endorser in that order. The three functional roles enable local governments to catalyze the creation of new ventures through projectification and partnering. Our study not only contributes to the literature on entrepreneurship, governance theory, and the theory of temporary organization but also provides an actionable approach for governments to foster new ventures, especially in transition economics such as China.

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Section: Phase 1: Product Conceptualizationmentioning

confidence: 96%

Section: Phase 2: Product Materializationmentioning

confidence: 99%

Section: Phase 3: Product Commercializationmentioning

confidence: 99%

See 1 more Smart Citation

Projectification and Partnering: An Amalgamated Approach for New Venture Creation in an Entrepreneurial Ecosystem

Liu

Fei-rong

Xia

et al. 2019

Emerging Markets Finance and Trade

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“…First, from a resource-based perspective, government subsidies replenish the shortage of innovation resources, reduce output uncertainty, and share the risks for small firms [10][11][12]. Second, government subsidies are useful signals for small firms to attract private investors from the viewpoint of signal theory [13,14]. There is serious information asymmetry between firms and outside investors due to the uncertainty of innovation activities.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Government Subsidy on Renewable Microgrid Investment Considering Double Externalities

Yong

2019

Sustainability

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Since microgrids require public support to make economic sense, governments regularly subsidize renewable microgrids to increase their renewable energy market penetration. In this study, we investigated the optimal subsidy level for governments to correct the market failure of microgrids and analyzed the impacts of regulation on the interaction between a microgrid and a distribution network operator (DNO). Specifically, we proposed economic rationales for government subsidies for microgrids regarding public interest benefits in relation to double externalities (learning spillover effect and environmental externality). We incorporated the double externalities into a three-echelon game model in an electricity supply chain with one regulator, one microgrid, and one DNO, in which the regulator decides the subsidy level to achieve maximal social welfare. We found that the double externalities and double marginalization caused underinvestment in microgrid capacity in the scenario without government intervention. The government could choose the appropriate subsidy level to achieve the system optimum, which led to a triple win for the microgrid, the DNO, and the social planner. Our analytical results also showed that the microgrid gained more benefits from regulation than the DNO. The microgrid may offer a negative wholesale price to the DNO in exchange for more opportunities to import electricity into the grid, especially when the investment cost is sufficiently low. Our study suggests that supporting microgrids requires a subsidy phase-out mechanism and alternative market-oriented policies with the development of the microgrid industry.The smart energy management system and storage devices enable microgrids to manage intermittent renewable energy and realize real-time power balancing within the system.Microgrids can provide cooling, heating, and electricity at the same time (e.g., the combined cooling, heating, and power, CCHP, system), which satisfies multidimensional service requirements [1].Since microgrids can operate either grid-connected or islanded, they are more flexible, controllable, and reliable than distributed generation systems [2]. This helps to reduce the effects of major power disruption events and buffer the impact of intermittent renewable energy generation on power grids, which increases the opportunities for microgrids to access the power network.Microgrids can provide differentiated services for sensitive users who may require higher power quality and a more resilient energy system (e.g., hospitals and data centers) [3].The market practice of combining battery swap stations for electric vehicles and microgrids provides a possible channel to efficiently shift the peak electricity load [4].China realized that its energy structure heavily relied on thermal power for its rapid economic growth, which limited high-quality development and green innovation in Chinese industry. China is devoted to supporting the efficient utilization of renewable energy and making efforts to deepen power system reform. The...

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“…Subsidies are considered to be a kind of the governmental warranty indicating on a sufficient status of the agricultural company. In particular, Yan and Li (2016) note the signal effect of subsidies for credit companies: banks pay more attention to approval effect of the state subsidies when making decisions on credits.…”

mentioning

confidence: 99%