Empirical Research On The Effect Of Venture Capital On Technological Innovation Of Listed Companies In Growth Enterprise Market

Innovation is regarded as the most fundamental accelerator of economy development.As a brand new finance instrument for technology based startups,venture capital is playing a very extinctive role in fostering innovation and easing finance pressure of small-sized technology enterprise.With the economic development of our country,the traditional development style which mainly depends on vast investment and exports comes to the end and is being replaced by the new economy development style which is facilitated by innovation.While innovation is going to be the most original source of economic development,venture capital now is going to be a mainstream financing method.‘Supply-side structural reform',emphasized by president Xi,conforms to the current economy status and provides development space for technological innovation and venture capital.Above all,research concerning effects of venture capital on innovation,is of vital academic and practical meanings.In this paper,I discuss effects of venture capital on the GEM listed companies' innovation process which can be divided into three inter-related stages including R&D input,technology output and performance excellence separately based on the CDM model,whereby we can get insight into the mechanism of how venture capital influence technical innovation process in GEM listed companies.Firstly,I reviewed papers relating to venture capital and technological innovation.Based on literature review,I state the theoretical analysis from three aspects of innovation process in enterprise.Besides,to deal with the ‘self-selection' problem,this paper firstly analyses the factors influence venture capital's project choose in order to eliminate the effects of these factors by Heckman two stage method,in order to improve robustness of this paper's conclusion.Using panel data of GEM listed companies in china from 2012 to 2014,it is initially proved that entrepreneur's characteristics,enterprise characteristics,industry and location of startups can significantly infect the probability of being elected by venture capital.By fitting CDM model,I find robust empirical support for a positive impact of venture capital on innovation activities.In R&D input model,venture capital is certified to increase R&D input intensity of enterprise invested by venture capital.Of technology output model,I choose patents and invent patents acquired in current year as the proxy variable of technology output.Statistical analysis shows venture capital involvement can increase the efficiency of patent output,butit can't increase the efficiency of invent output.In performance model,I find venture capital can improve the enterprise's performance relative to invent patent input significantly,while it can't improve enterprise's performance relative to total patents input.The conclusions of this paper implies venture capital can accelerate innovation activities of enterprise mainly by improving R&D input ratio and making the most advantage of invent patents.However,venture capital involvement can't improve invested company's research and development ability of invent patent.