Study On The Relationship Between China Venture Capital And High-tech Industry Innovation

Venture capital refers to venture capitalist choose target companies which have big potential and growth, especially high-tech companies, to offer them capital and administrate them operation. Venture capital financing the company to exchange some shares and sell them later to obtain more dividends. It's common in developed countries that venture capital promote high-tech industries innovation. But in china, because of the year of venture capital is short, and the development is not mature enough, that caused the impact on high-tech industries is not obvious. From previous research, most scholar affirmed that the role of venture capital in technological innovation, on the opposite, some scholars say it's no effects or even small effects on technological innovation. In order to determine whether venture capital to promote high-tech industries innovation in china, this paper aims to study the relationship between venture capital and high-tech industries technological innovation through theoretical and empirical analysis.This paper divided into theoretical analysis and empirical study. About theoretical analysis, the most of existing literature just from one aspect to analyze the role of venture capital to promote innovation, and there is no systematic analysis. Based on previous study, this paper from the view, which is the characteristics of venture capital and high-tech industries to systematical analyze the mechanism of venture capital and high-tech industries innovation. And divided the factors which influence innovation into two parts, one is input factors, another is influencing factors. About empirical study, the most of previous study based on current venture capital impact on high-tech industries innovation, this are static study. This paper based on the model, which is obtained from theoretical analysis, to study the dynamic effects on high-tech industries innovation after venture capital involve in. And study whether high-tech industries high output on innovation attract more venture capital invest in high-tech industries. Therefore, this paper selected data based on “China Statistics Yearbook on High Technology Industry” and “Wande PEVC” to empirical study. Due to dynamic study, explanatory variables included a lagged items of explained one, so it's better to use GMM method to regression analysis. Also to analyze five sectors of high-tech industries by GMM method. Results show that, the main impact on innovation in china is R&D expenditure, not venture capital, even though venture capital have a little effect. There is a large gap between china and developed countries.Finally, according to this results, put forward some policy recommendations in order to develop venture capital, make venture capital promote innovation more effectively.