Study On The Influence Of Private Equity On Economic Transformation

With the development of economy in China, the development mode of the past has exposed many drawbacks, the economy of China is in urgent need of transformation and upgrading, economic transformation has become a hot topic at present. On the other hand, as a new type of financial instruments in China, the private equity investment has become the second only to securities issuance and bank credit of the third major financing way after years of development, its role in economic development is increasingly prominent. The purpose of this paper is to discuss the mechanism of the influence of private equity on economic transformation, and to analyze the characteristics of the influence, then find the existing problems, and provide a reference for the future development of private equity investment in China.In this paper, we take five regions, including Beijing, Shanghai, Guangdong, Jiangsu four developed provinces and the national average, as the research object. Firstly, select the 23 indicators of economic transformation from 2004 to 2013 as panel data, through the factor analysis method to construct the economic transformation index, and score for each region. Secondly, take the economic transformation index as the dependent variable, the private equity investment as the independent variable, through the OLS method to analyze the relationship between private equity and economic transformation.Empirical research conclusions shows that, from the point of view of the types of private equity investment, VC investment can influence economic transformation more obviously than PE investment; from the point of view of time distribution, the effect of private equity investment on economic transformation is significant after one year of lag period; from the point of view of spatial distribution, the impact of private equity to economic transformation would be greater in the regions which the private equity is in the early development. The more mature the private equity is in one region, the more significant the effect of private equity on economic transformation. The results of the study also show that there are some problems as below, including the investment structure is irrational, the investment efficiency is low, and the development of the private equity investment in different regions is not balanced, and so on. Finally, according to the research conclusions, some policy suggestions are put forward for the problems of private equity investments.