Research On The Impact Of Government And Private Background Risk Investment On Business Efficiency

In many countries,the VC industry is shaped by the institutional context and China is no exception to this,starting from firstly founding government-leaded venture capital funds,then absorbing financial institutions,companies and private investors into this market.Objectively,compared with western developing countries,governmental assets occupy a larger space in China,while this doesn’t mean it can bring about better influences.Firstly,this paper briefly introduces venture capital’s developing history,investing subjects and capital resources,etc.Then basing on whether the capital comes from the government,individual and private enterprises or all of them,this paper divides venture capital into three kinds of situations:the government background,private background and mixed background.And in literature review,this paper summarizes the opinions on the relationship between the backgrounds of venture capital and the operating efficiencies of invsted enterprises from scholars at home and abroad.Then in the theory part,combing the principal-agent theory in information economics,the certification hypothesis and monitor hypothesis with China’s venture industry,this paper makes a comparative analysis between GVC and PVC from the perspective of purposes,motivations and operation mechanisms,in order to seek for the possible reasons for why venture capital’s different backgrounds can bring about different effects on the invested enterprises’ efficiency.This paper affirms the existence of some positive effects that venture capital has on enterprise’s performance,and then choose all the listed companies in China’s SME board from 2004 to 2012 as samples.By using DEA model and multiple linear regression model,this paper finally gets the empirical results showing that:the participation of GVC is significantly higher than that of PVC;meanwhile background differences will lead to different influences on the company’s performing efficiency,the impact of GVC is inferior to PVC;lastly,mixed background will improve company’s performance,and under such background,the company has the highest efficiency score.This paper considers reasons as follows:firstly,the political originals on GVC may cause a certain bias on balancing the degree of government intervention and market development,while the only motive of pursuing giant profits on GVC may help itself better meet the needs of venture capital’s fully market-oriented operation;secondly,GVC and PVC have differentiated operating mechanisms and monitoring systems,GVC is affected by many restrictions like the system environment and has higher principal-agent costs than PVC;lastly,mixed backgrounds can give full play to the advantages of joint investment by sharing resources and risks.Combing the theoretical and empirical parts,this paper views that China’s venture capital market certainly will go through a transition period,the central and local governments can take measures to improve the investing efficiency of GVC by learning from the experiences of America as well as other countries,in order to promote the overall development of China’s venture capital industry.