Abstract
With the Growth Enterprise Market (GEM) opening, China’s capital market system has been gradually improved, the total amount of venture capital investment has emerged explosive growth. This article focused on relationship between venture capital and enterprises’ performance of GEM listed companies in China. The empirical results found that venture capital involvement will enhance enterprises’ performance, a high proportion of venture capital holdings is conducive to enhancing enterprises’ performance, and the high reputation of venture capital institution is able to enhance enterprises’ performance.
Highlights
In the current growth rate (Growth) Enterprise Market (GEM) market, the percent of venture-backed companies is more than 70%, which indicated that the venture capital playing an increasingly important role in the market, and a growing number of venture capital involved in companies listed on the GEM indicates venture capital is playing an increasingly important role on hightech enterprises
Bing L. [6] studied on the relationship between slack resources and firm performance in entrepreneurial firms with the sample of China GEM listed companies from the perspective of managerial discretion theory, and focuses on how venture capital affects this relationship for post-IPO entrepreneurial firms
Descriptive statistics of the sample population can be seen from table 1. It mainly analyses the maximum, minimum, mean and standard deviation of the venture capital intervention and the enterprise performance, table 1 shows that Venture Capital Holdings accounts for 72% of the Sample Firms, which means that the risk of investment in China's GEM Listing Companies play an important role
Summary
In the current GEM market, the percent of venture-backed companies is more than 70%, which indicated that the venture capital playing an increasingly important role in the market, and a growing number of venture capital involved in companies listed on the GEM indicates venture capital is playing an increasingly important role on hightech enterprises. In Krishnan’s [2] study, the market share of the IPO enterprises invested by the venture capital institution is used to measure the reputation of the venture capital institution. [5] investigated the relationship between venture capital and the performance of the strategic emerging industries listed companies in China. The empirical result shows that: Venture capital has significant inhibited effect on the strategic emerging industries listed companies. Hochberg’s further research shows that the venture capital with high-shareholding and high-reputation can significantly improve the performance, while number of venture capital cannot. [6] studied on the relationship between slack resources and firm performance in entrepreneurial firms with the sample of China GEM listed companies from the perspective of managerial discretion theory, and focuses on how venture capital affects this relationship for post-IPO entrepreneurial firms Bing L. [6] studied on the relationship between slack resources and firm performance in entrepreneurial firms with the sample of China GEM listed companies from the perspective of managerial discretion theory, and focuses on how venture capital affects this relationship for post-IPO entrepreneurial firms
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