Empirical Study In The IPO Companies’ Performance To The Impact Of Foreign Venture Capital Participation

This article is based on the financial effect to study the enterprise value increasing route inforeign venture capital nurture program. By comparing foreign venture-backed, domesticventure-backed and non venture-backed IPO performance, it proves the demonstration of foreignventure capital in nurturing companies is more efficiently than domestic venture-backed, andsignificantly better than the non venture-backed enterprise’s situation. Through theoreticalanalysis, we identify the underlying causes of the risks of foreign investment and domesticventure capital formation differences, as well as foreign venture capital operation mechanism ofvalue-added services and corporate governance. Through statistical and econometric analysis, wetest whether foreign background venture can significantly affect the performance of the company,including the cumulative abnormal return on the company’s financial performance and stockmarkets. Thus we could figure out the venture capital participation for foreign invested enterprisesaffected by long-term performance mechanisms; finally, at the existing problems and obstacle ofthe domestic venture capital, we give the suggestions of cultivating, and learn from the successfulexperience of foreign venture capital and the feasibility of proposed countermeasures.This study supports the following conclusions: Venture capital of foreign background in theenterprise is more rational with better mechanisms and corporate governance arrangements.Foreign venture-backed enterprise has better financial performance of the company’s investment,and significantly higher than non-venture foreign background, and ultimately affect the stockmarket’s return.