VC Background、Listing Qualifications And Long-run Performance

Sound law and system environment should be the guarantee for the development of VC. Since China has special economic, legal, policy, business, financial and geographical environment, compared with the United States, Europe and other countries, China’s VC appear uniqueness in business mode, behavior characteristics and functional mechanism. In recent years, domestic and foreign scholars have done a wide range of researches in various fields about the role of Venture capital. However, since there’s no detailed public data about Venture capital behavior in China, empirical research remains to be further studied in this respect.Eyeing the opportunity, this paper mainly studies the influence of the VC and its background on IPO application and IPO long-term performance, which intends to provide theoretical basis for better promote the development of venture investment in China. Through manual collection for VC shareholders and its background data of listing applicants from2004to2011, we found that the applicants with shareholder support of venture capital get higher successful rate than those no venture-backed companies. As research continues, the VC shareholders be classified according to its associated political background, we found that VC’s political association has significant influence on the obtaining of listing qualifications. Considering the imbalance of marketization process in China, the marketization degree differs from different areas and regions. This paper classified the applicants by registered locations, and found that when the companies are from low marketization degree areas, they’re more likely to make full use of VC’s political background to get listing qualifications.This paper also studied the IPO long-term performance of listed companies under different background of VC, and further analyzed the functional mechanism. The empirical results show that the performance of political venture-backed companies was significantly lower than non-political venture-backed companies. In terms of influence mechanism, we found that relative to the political venture-backed companies, non-political venture-backed companies had a more reasonable setting of corporate governance structure, and more advantages of profitability and these two aspects directly lead to better IPO long-term performance.To sum up, the innovation and significance of this article lies in:1) Studied the VC’s political connections. Classified the VC by political background, and respectively discussed the differences of the two types in helping the invested companies go public and get good long-term performance. In theory, enriched and expanded the related literature and established empirical research experience.2) Examined the problem of IPO qualification:as a new research Angle of view, the essay confirmed that institution’s political association can help enterprises to obtain equity financing to alleviate the financing pressure.3) Widened the dimension of the VC research:study the roles of VC both in the IPO and after the IPO;4) Expanded the sample size:Covering all A-share listing applicants during2004-2011, including IPO failed enterprises.5) Collected large number of manual data:in this paper, most of the data is from the non-disclosure market. During the process of setting the reasonable standard and search the query one by one, we provided the guarantee of the authenticity, reliability, completeness and unity of the data.