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Venture Capital Investment and the Post-IPO Performance of Entrepreneurial Firms: Evidence from the People's Republic of China

Author

Listed:
  • Di Guo

    (Faculty of Business and Economics, University of Hong Kong)

  • Kun Jiang

    (Business School, University of Roehampton)

  • Xiaoting Mai

    (Faculty of Business and Economics, University of Hong Kong)

Abstract
We examine the effects of venture capital (VC) investment on the performance (measured by return on assets, return on equity, and Tobin's Q) and growth (measured by growth of total sales and total number of employees) of entrepreneurial firms in the People's Republic of China (PRC) after an initial public offering (IPO). Firm-level panel data analysis shows that VC investment contributes to the long-term performance and growth of entrepreneurial firms after an IPO. Meanwhile, we observe a significant and positive relationship between corporate governance of firms and VC investment. However, we do not find that experience or specialization of VC firms influences the effects of venture investment on post-IPO performance or growth of entrepreneurial firms in the PRC.

Suggested Citation

  • Di Guo & Kun Jiang & Xiaoting Mai, 2015. "Venture Capital Investment and the Post-IPO Performance of Entrepreneurial Firms: Evidence from the People's Republic of China," Asian Development Review, MIT Press, vol. 32(1), pages 113-141, March.
    • Handle: RePEc:tpr:adbadr:v:31:y:2015:i:2:p:113-141
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    References listed on IDEAS

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    Cited by:

    1. Song, Tianyi & Kutsuna, Kenji, 2023. "Venture capital investment and institutional factors: Evidence from China," Research in International Business and Finance, Elsevier, vol. 65(C).
    2. Zhang, Yeqing & Zhang, Xueyong, 2020. "Patent growth and the long-run performance of VC-backed IPOs," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 33-47.
    3. Magnus Henrekson & Tino Sanandaji, 2018. "Stock option taxation: a missing piece in European innovation policy?," Small Business Economics, Springer, vol. 51(2), pages 411-424, August.
    4. Li, Wanli & Cao, Ting & Feng, Zhaozhen, 2016. "Heterogeneous venture capital, M&A activity, and market response," Emerging Markets Review, Elsevier, vol. 29(C), pages 168-199.

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    More about this item

    Keywords

    China; venture capital investment; entrepreneurial firms; post-IPO;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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