Abstract
Small- and medium-sized enterprises (SMEs) are considered to have potential innovation capabilities and can create new market opportunities. Venture capital can financially support entrepreneurial activities for economic growth and governs and nurtures the growth of the SMEs. The aim of this study is to investigate the influence mechanism of venture capital on the development of SMEs in agri-food industry. Based on the enterprise growth theory, this study constructed an evaluation model, consisting of technological innovation, profitability, development capability, and solvency, to examine the effect of venture capital on the growth of agricultural SMEs. Using data of 40 agricultural SEMs from the SME and ChiNext boards in China, the empirical analysis has been conducted with the multivariate regression analysis method. The results show that the venture capital can significantly improve the technology innovation, profitability, and growth ability of SMEs. For the solvency of SMEs, the promoting role of venture capital is not obvious. Finally, the practical implications of this study for venture capitalists, entrepreneurs, and regulators are discussed.
Highlights
Small- and medium-sized enterprises (SMEs) are of great value to the stable and sustainable development of the economy and attracted high attention from governments worldwide
Descriptive Statistics. e statistical results show that venture capitalist prefers to invest in SMEs which have relatively stable income. e shareholding ratio of venture capital has influences on the operation of SMEs. e rational shareholding ratio of venture capital can effectively improve the technological innovation and the operating performance of SMEs
Conclusions. is review created an evaluation model to investigate the impact of venture capital and the share ratio of venture capital on the growth of SMEs in agriculture based on enterprise growth theory. ese findings can help the entrepreneurs of SMEs set a reasonable development plan to attract venture capital
Summary
Small- and medium-sized enterprises (SMEs) are of great value to the stable and sustainable development of the economy and attracted high attention from governments worldwide. Data collected by Ayyagari et al from 76 developing and developed countries show that SMEs account for nearly 60% of manufacturing employment on average [1]. According to data from the National Bureau of Statistics, there are 369,000 SMEs at the end of 2018 in China, accounting for 97.6% of the total number of industrial enterprises above the designated size. E main business income of SMEs reached 57.9 trillion Yuan, accounting for. E total profit of SMEs was 3.4 trillion Yuan, accounting for 51.6% of the total profits of the enterprises. SMEs play a significant role in contributing to the national goal of wealth creation and making China an industrialized country [4]
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