Research On The Effect Of Corporate Venture Capital In China

Corporate venture capital(CVC)is venture capital investment by non-financial companies.It has developed to a relatively mature stage in China and holds a significant position in the venture capital and even capital markets.However,there is a relative lack of research in this field.First of all,previous studies have shown the following two characteristics: first,they focus more on independent venture capital(IVC),and they focus less on CVC;second,they conduct overall research on venture capital without distinguishing IVC and CVC.Therefore,this paper focuses on CVC.Secondly,the existing research has been controversial about whether CVC can bring positive effects(such as whether CVC can add value to the invested company).Therefore,this paper conducts a two-way study from the invested company and the investment subject.Test whether CVC can improve performance.Aiming at the role of CVC on invested companies,because of the large number of invested companies,which can form a good data sample,this paper use propensity score matching and simultaneous equations to conduct empirical analysis.This paper selects the relevant data of small and medium-sized listed companies on the Shenzhen Stock Exchange from 2007 to 2017 to conduct an empirical test.The empirical results show that form the ROA and ROE,the effect of CVC is better than IVC.In addition,CVC does give invested company a better market valuation than IVC.Aiming at the role of CVC on investment subjects,because the number of large companies participating in CVC business in China is relatively small,if we adopt the empirical analysis,the sample size is too smaller than the invested company,which is not conducive to the measurement analysis.If we use simple financial data for comparison,we can not describe the strategic benefits of CVC parent company very well.So this paper chooses case analysis method to analyze whether the performance of CVC parent company is improved.This paper selects Lenovo Holdings as the research object because it has three characteristics.First,Lenovo Holdings transformed from a technology-based state-owned enterprise into a comprehensive investment holding company,and its high-tech and state-owned background is very representative.Second,unlike the rising stars such as Byte Dance,Lenovo Holdings has come along with the history of Chinese CVC.Its strategic development history can basically represent the development process of Chinese CVC.Third,Lenovo Holdings does not emphasize strategic investment as much as ordinary CVCs,despise financial investments.Instead,it adopts a "two-wheel drive" model of strategic investment and financial investment,which makes it both representative and comprehensive.Through case analysis,this paper finds that Lenovo's "two-wheel drive" model does enable it to obtain good financial and strategic returns.In addition,the invested company has also achieved good development and achieved a win-win situation.