Research on the relationship between VC/PE and invested enterprises growth

Abstract

In recent years, with the rapid development of small and medium-sized enterprises in China, the partial enterprises have been constructed to be the new power to promote the domestic economic growth. However, due to the particularity of organization structures, corporate standards and business risks, the participation of VC and PE institutions is very important for the development of enterprises. This paper takes the small and medium-sized enterprise board as the research object and carries out the research on the relationship between VC/PE and invested enterprise growth. Firstly, the growth rate of business income and net profit are selected as the quantitative indexes to measure the enterprise growth. Through the comparison and analysis, it is found that the enterprise with the VC/PE background will have a stronger growth capacity than the enterprise without such background. On the basis of the conclusion that VC/PE exerts advantageous influence upon the growth of enterprises, the shareholding ratio of VC/PE is regarded as the independent variable, return on equity, asset-liability ratio, total asset turnover ratio and total assets are taken as the control variables, the growth rate of business income and net profit are selected as the dependent variables. By utilizing the correlation analysis and regression analysis methods, the research indicates that the shareholding ratio of VC/PE will have a positive correlation with the growth capacity of the enterprise.